easyJet (LON: EZJ) share price has been in a strong downward trend in 2022 even as the aviation industry makes a strong recovery. The stock crashed to a low of 276p, which was the lowest level since September 2011. It has fallen by more than 81% in 2015.
easyJet earnings ahead
easyJet is a leading regional aviation company that has thousands of workers in Europe. The firm focuses on western Europe, where it has a strong market share. It competes with other large regional airlines like Ryanair and Wizz Air.
Like other companies in the transport and tourism industries, easyJet has had a difficult time this year even as demand rises. The war in Ukraine has led to tapered demand even though the firm has no major presence in Eastern Europe.
In addition, easyJet has had to deal with an ugly summer that saw it cancel thousands of flights. Most importantly, the company is struggling with significantly high energy prices since jet fuel has surged to the highest level in years. Most importantly, Gatwick Airport placed caps on passengers.
The next key catalyst for easyJet share price will be the upcoming financial results that are scheduled for Friday this week. These results will give the management a chance to talk about its business and the ongoing trends in the sector.
In its most recent quarterly results, the company said that it flew 22 million people, which was more than 7 times than it did in the same period in 2021. At the same time, the company’s passengers represented 87% of its capacity in 2019.
Therefore, there is a feeling that the company’s business is doing well. Demand is still high, jet fuel price is stabilising while airports have continued to increase their capacity. Most importantly, the company seems to be significantly undervalued.
easyJet share price forecast
The daily chart shows that the easyJet stock price has been in a strong bearish trend in the past few months. This decline saw the stock crash below the important support level at 338p, which was the lowest level on July 5. It has also dropped below all moving averages while the MACD and the Relative Strength Index (RSI) are tilting downwards.
Recently, however, there are signs that the stock is bottoming. As such, a brief rebound to the resistance point at 338p cannot be ruled out.
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