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On Thursday, JPMorgan analysts initiated coverage on Jet2 plc (JET2:LN) with an Overweight rating and set a price target of GBP19.00. The firm’s positive outlook on the UK-based airline and package holiday provider is based on several key factors, including the company’s customer-first approach and its ability to convert growth into profitability and cash flow.
Jet2, known for its short-haul flights and holiday packages within the UK market, has been recognized by JPMorgan for its strong financial performance, particularly in terms of profit conversion and cash generation. The analysts highlighted the potential for the company to increase its market share in the face of improving competitive dynamics in the coming years.
Despite a challenging year-to-date performance, with shares falling by 20% due to a cost-related profit warning and uncertainties affecting the travel industry, JPMorgan views the current market correction as an opportune moment for investors to engage with a business that exhibits both high returns and defensive characteristics.
The analysts also noted Jet2’s attractive valuation, currently trading at 6 times price-to-earnings ratio and offering a 20% free cash flow yield. This places the company at the lower end of JPMorgan’s coverage on low-cost carriers and near the bottom of its historical valuation range.
In summary, JPMorgan’s initiation of Jet2 with an Overweight rating and a December 2026 price target of 1900p reflects the firm’s confidence in the airline’s business model, competitive positioning, and financial health. The analysts see approximately 50% upside potential for the stock, underpinned by the company’s strong track record and favorable market conditions.
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