EasyJet share price has collapsed in the past few years. The stock collapsed by more than 73% in the past five years as concerns about its growth remain. It was trading at 300p on Tuesday, meaning that it has crashed by more than 50% this year alone.
Is EZJ a good buy?
EasyJet is a leading budget airline that has seen better times. The stock surged to its all-time high of 1,630p in February 2015. It has been a downward spiral since then and the stock has collapsed by more than 81%.
During this time, the company had to deal with a global pandemic that forced it to stop its business. At the time, the firm was burning millions of pounds every month. At the same time, the company’s management decided to turn down an acquisition bid by Wizz Air.
In retrospect, most analysts believe that the bid was a good one since the shares have crashed by more than 60% since that time. The firm continues to face the challenge of a slowing economy, depreciating currency, and high jet fuel prices.
EasyJet is now implementing a turnaround strategy. Last month, it announced a board shakeup that saw its three directors leaving the firm. Nick Leeder, who joined the board in 2019 stepped down in September. Julie Southern and Andreas Bierwirth will not seek re-election. They will be replaced by Herald Eisenacher, Detlef Trefzger, and Ryanne Van der Eijik. The company also ditched a controversial carbon offsetting plan.
On a positive note, EasyJet’s business has stabilized after having a chaotic summer when it was forced to cut flights. Analysts believe that its business will continue doing well in the coming months as demand remains elevated. Most importantly, EasyJet is an expert in fuel hedging and has no exposure to Western Europe.
EasyJet share price forecast
The daily chart shows that the EasyJet share price has been in a strong bearish trend in the past few months. This decline has surely made the stock substantially cheaper since analysts believe that it will turn a profit in the next financial year.
The stock remains below all moving averages while the Relative Strength Index has started moving upwards. It has also formed a small doji pattern.
Therefore, the stock will likely rebound as buyers target the important resistance at 338p, which is about 11% above the current level. A drop below the support at 280p will invalidate the bullish view
