RBC has repeated an 'outperform' rating on UK package holidays firm (and viral meme) Jet2 PLC (AIM:JET2), calling it “best risk-reward" stock in the travel sector.
UK-based analysts for the Canadian bank pitch a £21.50 p price that implies some 65% upside from current levels, of around 1,379p.
The analyst team at RBC has trimmed FY27–FY28 earnings by roughly 6%, largely to reflect start-up losses at the new Gatwick base, though FY26 and FY29 expectations remain firm as the operation is projected to turn profitable by the end of the decade.
Despite Monday's downgrade, RBC remains at least somewhat upbeat on Jet2’s investment case. Analysts point to Jet2's strong balance sheet, scope for additional buybacks beyond the newly announced £100m, and an improving competitive backdrop.
The broker also notes that Jet2 continues to trade at a notably cheap valuation versus both its UK and European peers, even when factoring in near-term margin dilution.
RBC views the Gatwick move as strategically important, positioning Jet2 in a high-return airport where competitors such as easyJet already enjoy above-average economics.
Longer term, Jet2’s scale-up into more efficient A321neos and a historically strong ROIC profile underpin expectations for renewed margin expansion from FY28 onwards.