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Jet2 (LSE: JET2) stays listed on the AIM (Various Funding Market) — at the very least for now. With sturdy earnings momentum, a web money place, and a market capitalisation approaching FTSE 100 territory, analysts more and more imagine the corporate may very well be a future candidate for the blue-chip index. The difficulty is, it’s not listed on the primary market.
Jet2 shares presently commerce at 1,628p, however the common analyst goal value is 2,164p. That just about 33% up from present ranges. The best goal, 2,500p, implies 54% potential appreciation. Among the many 12 analysts masking the inventory, the consensus is firmly in Purchase territory.
What’s driving the optimism?
Valuation and web money place
Jet2’s ahead valuation seems undemanding. The shares commerce on simply 7.8 instances ahead earnings for 2025, falling to 7.1 instances in 2026 and 6.4 instances by 2027. That locations it nicely beneath the broader journey sector common. That’s regardless of being probably the most thrilling corporations within the house.
On an enterprise value-to-EBITDA foundation — which adjusts for web money — the inventory seems even cheaper. EV-to-EBITDA is simply 1.48 instances in 2025, declining to 0.98 instances in 2026. For context, many world friends within the leisure and aviation sectors commerce round 4-8 instances on this metric. IAG, for instance, trades round 3.7 instances.
A key a part of the valuation enchantment lies in Jet2’s web money place. Web money is projected to rise to just about £2.5bn by 2026. That provides Jet2 an unusually clear stability sheet in a sector typically burdened with excessive debt ranges. It additionally considerably compresses its enterprise worth and helps its capacity to take a position, broaden, or return capital.
Operational progress
Operationally, Jet2 has managed to stability decrease gasoline prices with rising labour prices. Jet2 faces a £25m hike in annual employment prices because of adjustments introduced in October’s Finances.
Administration had budgeted for rising employment prices, whereas benefiting from extra beneficial jet gasoline pricing. Earnings are anticipated to develop steadily, with EPS forecast to rise from 207p in in 2025 to 254p by in 2027.
There are, after all, dangers. Labour prices may escalate quicker than anticipated, and any spike in oil costs would compress margins. Moreover, shopper confidence stays a key variable, particularly with higher-for-longer rates of interest.
FTSE 100 in sight?
Properly, it’s actually doable to think about Jet2 on the FTSE 100.
With a present market cap of £3.3bn, Jet2 isn’t but giant sufficient for FTSE 100 inclusion. Nevertheless, analysts see 33% appreciation from present ranges to succeed in truthful worth, which might indicate a valuation of round £4.4bn. That will place Jet2 nicely above the everyday £3.5bn–£3.7bn threshold for entry into the index — assuming it had been listed on the primary market.
With sturdy fundamentals, enticing valuation, and a web money buffer, Jet2 seems more and more prepared for the massive league. It’s part of my portfolio and I imagine traders ought to give it loads of consideration.
