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EasyJet shares hit pre-pandemic levels but analysts remain neutral

The easyJet share price is the highest it’s been since Covid-19 grounded flights. With the British government preparing its summer holiday traffic light systems, easyJet shares have increased by as much as 4% in recent days.

  • easyJet share price highest since March 2020.
  • Shares up as much as 4% this week.
  • Travel to resume but will uncertainty hurt airlines?
  • Want to trade easyJet shares? Open an account today

Shares in easyJet PLC appear to be benefitting from renewed hope that the UK’s travel ban will not only end on 17 May, but that large parts of Europe will be accessible. Although Prime Minister Boris Johnson has stated that he’ll adopt a ‘cautious’ approach to reopening flight paths, many popular holiday destinations could be on the so-called ‘green list’.

How is the prospect of travel helping easyJet shares?

The positive news has buoyed the easyJet share price. From an opening value of £10.38 on 28 April, easyJet shares climbed to a five-day high of £10.81 on 4 May. The price has since dropped and opened at £10.45 on 5 May.

However, this slight pullback hasn’t hurt the company’s overall share value. As well as today’s opening price being the highest it has been in six months, it’s now averaging more than March 2020, just before Covid-19 restrictions took hold. The latest analyst ratings remain neutral, even though the easyJet share price has already surpassed recent expectations.

JP Morgan’s advice on 27 April set a price target of £8.45. Barclays’ analysts took a similar position in April, issuing an easyJet share price target of £9.40. Of the major investment banks analysing easyJet shares, Credit Suisse was the most optimistic in April, setting a price target of £12.00. The recent bull run has certainly given more credence to this forecast.

What could stop the easyJet share price bull run?

A lack of clarity is the biggest issue facing all airlines, including Ryanair and Wizz Air, right now. Indeed, the return of international travel is far from set. Travel agents are demanding more clarity from the government over its proposed traffic light system.

Officials have made it clear that countries will either be classified as green, amber, or red. Britons can travel to green countries without quarantining on their return. Anyone returning from an amber country will likely have to quarantine, possibly at home. Travel to countries on the red list will be banned for all but essential purposes. However, despite what’s been published in the media, at the time of writing, the government has already missed the deadline for publishing its official plans.

The uncertainty means that countries such as Spain and Greece may not be on the green list until June. This could hurt easyJet’s recent bullish run, as was the case in 2020, as a large percentage of its flights go to these destinations. Moreover, booking hesitation or fewer than expected green-listed countries could see travel resume at a slow pace. Therefore, while the easyJet share price is currently in a positive place, there may be short-term fluctuations before it finds some long-term stability.

Will easyJet shares maintain their upward trajectory?

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