EasyJet Share Price Forecast Amid IAG Buyout Rumours

EasyJet share price popped to the highest level since September 22. It was trading at 348p, which was about 26% about the lowest level in October. The stock remains about 52% below the highest level this year despite the comeback of aviation industry. So, will IAG acquire EasyJet?

IAG-EasyJet merger rumours

EasyJet is a leading regional airline that has a strong presence in western Europe. The company operates countries like the United Kingdom, Germany, France, Italy, Greece, and Spain among others. As a budget airline, the company makes most of its money from leisure travel.

EasyJet share price popped sharply on Monday after rumours emerged that IAG was planning to make a bid for the company. IAG is a major aviation conglomerate that owns airlines like British Airways, Iberia, and Aer Lingus among others.

IAG has a market cap of more than 5.96 billion pounds while EasyJet is valued at over 2.58 billion pounds. As such, the combination will create the second-biggest aviation company in Europe after Ryanair, which is valued at over $13.51 billion.

EasyJet has been a target of acquisitions before. In 2021, the company famously rejected a bid by Wizz Air, another regional company. Analysts believe that EasyJet lost an important opportunity back then since its stock price has plummeted since then. And if IAG makes a bid, it will likely be smaller than what Wizz Air made.

An IAG and EasyJet merger will give IAG a bigger stake in regional sector. As you recall, British Airways was considering launching its own low-cost regional airline in 2021. EasyJet will also give it a bigger market share in Europe’s aviation industry.

Analysts believe that the European aviation industry is ripe for consolidation. Such moves will lead to more cost cuts and measures to make the industry more competitive.

EasyJet share price forecast

The four-hour chart shows that the EasyJet share price has been in a strong bullish trend in the past few days. As the stock rose, it managed to move above the important resistance level at 338.1p, which was the lowest level on July 5. The stock has jumped above the 50-day moving average while the Relative Strength Index (RSI) has continued rising. 

Therefore, the stock will likely continue rising as buyers target the next key level at 400p. A drop below the support ay 338p will invalidate the bullish view.

EasyJet share price