Jet2 stock plunges 13% as later bookings, weak flight demand hit forecasts

Investing.com -- Jet2 (LON:JET2) shares sank more than 13% on Thursday after the airline and tour operator reported later summer bookings and weaker flight-only pricing in its annual general meeting trading update, prompting analysts to cut earnings forecasts.

In summer 2025, demand has shifted later in the season, with late bookings becoming more prevalent since July, the company noted. 

While package holidays continue to show resilience with modest price increases, flight-only tickets are being marketed as “increasingly attractive.” 

Seat capacity for the summer remains unchanged at 18.5 million, up 8% from the prior year.

Analysts at Jefferies cut estimates for fiscal 2026 and 2027 earnings before interest and taxes (EBIT) by 6% and 8%, citing softer capacity, mix and pricing. 

EBIT for 2026 is now projected at £462 million, compared with a previous forecast of £493 million. For 2027, the estimate was lowered to £498 million from £540 million. 

The company said it expects EBIT to be “towards the lower end” of the consensus range of £449 million to £496 million.

Revenue forecasts were reduced to £7.58 billion for 2026 and £8.17 billion for 2027, reflecting cuts of 3% and 5%. Jefferies also lowered earnings per share estimates to 210p in 2026 from 217p and to 214p in 2027 from 226p.

For the upcoming winter season, Jet2 scaled back capacity plans to 5.6 million seats, compared with an initial 5.8 million.

 The figure still represents a 9% increase from the prior year. The company said “much of winter seat capacity still to sell,” and added it plans “to maintain attractive pricing.”

Jefferies also adjusted EBITDA forecasts, lowering 2026 estimates to £772 million from £803 million and 2027 to £818 million from £860 million. 

The brokerage cut its price target for Jet2 shares to £21 from £22, citing “greater UK uncertainty.”

Jet2 reported revenue of £7.17 billion in fiscal 2025, with EBITDA of £739 million. Shares, which closed at 1,613p on Wednesday, traded near their lowest level in more than four months following Thursday’s drop.

 The company’s market capitalization stood at £3.5 billion prior to the decline. Jefferies noted that packages remain a “bright spot” for Jet2, with unchanged demand trends and price growth.

The analysts said the company’s vertically integrated model continues to provide flexibility but warned that later bookings and pricing pressure in flights are weighing on earnings projections.

The brokerage flagged that Jet2 shares trade at a 43% discount to pre-pandemic price-to-earnings multiples, with Jefferies maintaining a "buy" rating despite the revised target.