Jet2 PLC (JET2) AI Stock Analysis

• Market Cap: $2.71B
• Dividend Yield: 1.16%
• Average Volume (3M): 586.63K
• Price to Earnings (P/E): 5.4
• Beta (1Y): 0.84
• Revenue Growth: 18.05%
• EPS Growth: 16.71%
• Country: UK
• Employees: 14,053
• Sector: Consumer Cyclical
• Sector Strength: 62
• Industry: Travel Services
• EPS (TTM): 2.34
• Shares Outstanding: 214,683,850
• 10 Day Avg. Volume: 603,418
• 30 Day Avg. Volume: 586,630
• PEG Ratio: 0.32
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.42
• Price to Cash Flow (P/CF): 1.60
• P/FCF Ratio: 2.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 2,042.99p
• Price Target Upside: 62.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

Jet2 PLC's overall stock score reflects its robust financial growth and strategic debt management, which enhance its market position. Despite current bearish technical indicators, the stock's undervaluation presents a potential investment opportunity. Ongoing financial health and strategic bond repurchase are key strengths, while high liabilities and market volatility remain challenges.

Positive Factors

Financial Performance

Jet2 saw a strong H1 with a 4% PBT beat vs our estimate and 7% on EPS.

Investment Strategy

Jet2's investment thesis is driven by a unique proposition, fleet expansion and a net cash balance sheet.

Negative Factors

Earnings Guidance

The updated FY25/26E PBT sits below consensus and factors in higher FY26E operating expenses inflation.

Trading Conditions

Jet2's FY25 PBT guidance range reflects softer Winter trading.

Jet2 PLC Business Overview & Revenue Model

Company Description

Jet2 PLC (JET2) is a leading leisure travel group headquartered in the United Kingdom. The company operates in the travel and tourism sectors, providing package holidays, hotel bookings, and scheduled leisure flights. Its core services are delivered through its two main brands: Jet2holidays, which offers ATOL-protected package holidays, and Jet2.com, an award-winning airline offering flights to various holiday destinations.

How the Company Makes Money

Jet2 PLC generates revenue primarily through its integrated model of holiday packages and airline services. The company makes money by selling holiday packages through Jet2holidays, which include flights, accommodation, and other travel-related services. Revenue is also derived from ticket sales via Jet2.com, which operates as a low-cost airline. Additional income streams include ancillary services such as in-flight sales, seat selection fees, and travel insurance. Partnerships with hotels and other travel service providers play a significant role in its business model by ensuring competitive pricing and exclusive offers for customers, thus enhancing its package holiday offerings.

Jet2 PLC Financial Statement Overview

Summary

Jet2 PLC exhibits a robust financial trajectory with significant improvements in revenue, profitability, and return on equity. The company has effectively leveraged its equity base to enhance profitability, though high liabilities necessitate careful management. Strong operational cash flows provide a solid foundation for ongoing financial health, positioning Jet2 well in the competitive hotels, lodging, and leisure industry. Continued focus on optimizing leverage and managing capital expenditures could further strengthen its financial standing.

Income Statement

Jet2 PLC has demonstrated robust revenue growth, showing a remarkable recovery with a consistent increase in total revenue over the past few years. The gross profit margin improved to 13.45% from a negative figure in 2022, indicating enhanced operational efficiency. Net profit margin stands at 6.38%, reflecting profitability improvements. Additionally, the EBIT and EBITDA margins are healthy at 6.84% and 13.57%, respectively, suggesting strong operational performance. However, maintaining these levels in a competitive industry remains a challenge.

Balance Sheet

The company's balance sheet shows a solid equity position with an equity ratio of 25.29%, indicating a stable financial structure. The debt-to-equity ratio is 1.03, reflecting manageable leverage. The return on equity has significantly improved to 28.32%, showcasing effective use of shareholders' funds to generate profits. However, the overall liabilities are relatively high, which could pose risks if not managed efficiently.

Cash Flow

Jet2 PLC's cash flow statement presents a strong operating cash flow to net income ratio of 2.74, indicating efficient cash generation from operations. The free cash flow to net income ratio is 1.72, demonstrating robust cash flow relative to earnings, supporting future investments and debt obligations. However, the free cash flow growth rate is slightly negative, suggesting the need for improved capital expenditure management.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
6.26B	5.03B	1.23B	395.40M	3.58B
	Gross Profit
841.20M	707.70M	-147.90M	-264.90M	503.30M
	EBIT
428.20M	394.00M	-323.90M	-336.10M	293.00M
	EBITDA
849.20M	579.20M	-172.00M	-165.70M	427.20M
	Net Income Common Stockholders
399.20M	290.80M	-315.40M	-271.20M	116.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.18B	2.62B	2.23B	1.38B	1.39B
	Total Assets
5.57B	4.53B	3.99B	2.87B	3.38B
	Total Debt
1.46B	1.38B	1.57B	1.32B	1.16B
	Net Debt
15.80M	-1.25B	522.70M	-60.70M	-229.10M
	Total Liabilities
4.16B	3.51B	3.10B	1.91B	2.75B
	Stockholders Equity
1.41B	1.01B	896.60M	964.20M	634.10M
Cash Flow		Free Cash Flow
685.50M	755.50M	642.60M	-872.20M	205.00M
	Operating Cash Flow
1.09B	952.10M	751.00M	-834.80M	443.10M
	Investing Cash Flow
-482.30M	-675.80M	-1.29B	41.10M	-185.60M
	Financing Cash Flow
-124.60M	-370.30M	201.00M	797.40M	-88.10M

Jet2 PLC Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1254.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:JET2, the sentiment is Negative. The current price of 1254 is below the 20-day moving average (MA) of 1291.85, below the 50-day MA of 1378.16, and below the 200-day MA of 1430.64, indicating a bearish trend. The MACD of -39.10 indicates Positive momentum. The RSI at 30.90 is Neutral, neither overbought nor oversold. The STOCH value of 2.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:JET2.

Jet2 PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JET2	76 Outperform	$2.71B	5.39	29.34%	1.16%	18.05%	16.71%
EZJ	75 Outperform	$3.42B	7.50	15.85%	2.94%	13.93%	40.22%
IAG	73 Outperform	£11.71B	5.21	58.10%	0.83%	6.07%	0.66%
WIZZ	62 Neutral	£1.48B	5.79	88.27%	―	5.20%	13.48%
Sector *	59 Neutral	$11.38B	10.18	-0.84%	4.04%	1.25%	-16.04%

Jet2 PLC Corporate Events

Jet2 PLC Announces Final Repurchase Price for Convertible Bonds

Jet2 PLC has announced the final repurchase price for its 1.625% Guaranteed Senior Unsecured Convertible Bonds due 2026, with a principal amount of £301.5 million accepted for purchase. This move is part of a strategic financial maneuver to manage its debt obligations, potentially improving its financial stability and market position.

Jet2 PLC Successfully Repurchases Majority of Convertible Bonds

Jet2 PLC has announced the successful repurchase of £301.5 million of its convertible bonds due in 2026, representing approximately 99% of the outstanding bonds. This strategic move significantly reduces the company’s debt obligations and positions it for potential future financial flexibility, as the remaining bonds will be redeemed early, impacting stakeholders by potentially enhancing the company’s financial stability.

Jet2 PLC Initiates Convertible Bonds Repurchase to Strengthen Financial Position

Jet2 PLC has announced a repurchase initiative for its outstanding convertible bonds due in 2026, valued at £304.4 million. This strategic move is aimed at strengthening the company’s financial position by reducing debt, potentially enhancing its market standing and providing stability for stakeholders.

Jet2 PLC Announces Change in Voting Rights Ownership

Jet2 PLC, a UK-based company, has announced a change in the ownership of its voting rights. Computershare Trustees (Jersey) Limited has increased its holding from 3.1857% to 4.0783% of the total voting rights in Jet2 PLC. This development reflects a shift in shareholder dynamics, which could influence the company’s future decision-making and governance structure.

Jet2 plc Projects Increased Profit Amid Expansion and Economic Challenges

Jet2 plc reports an anticipated profit growth of 8% to 10% for the financial year ending March 2025, despite a decrease in average load factor and competitive pricing pressures. The company has expanded its seat capacity for both winter 2024/25 and summer 2025, with new bases at Bournemouth and London Luton contributing to this growth. However, these new bases are expected to be modestly loss-making initially due to their late introduction. Inflationary pressures and additional costs from government regulations pose challenges, but strategic investments in new aircraft and cost hedging are helping to mitigate these issues. Jet2 is focused on maintaining its Customer First proposition, even as macroeconomic conditions may pressure profit margins. The company remains confident in its ability to attract customers due to its trusted brand and comprehensive holiday offerings.

Jet2 plc Strengthens Position with Bond Repurchase

Jet2 plc has repurchased an additional £33 million of its £337.4 million convertible bonds due in 2026, at a total consideration of £34.5 million. This move reduces the outstanding bond principal to £304.4 million, potentially strengthening Jet2’s financial position and reflecting strategic financial management.