A boost in the easyJet (LSE:EZJ) share price over the past month has allowed the low-cost airline to cling on to its place in the FTSE 100 index. The company had been tipped for potential relegation from the UK’s leading benchmark in this week’s quarterly reshuffle.
As a shareholder, I’m pleased by this news. However, I’m also acutely conscious that easyJet shares are still down 62% from their pre-pandemic high.
Here’s what the charts say about the outlook for the Luton-headquartered business.
Valuation
Using the price-to-sales (P/S) ratio as a valuation metric, easyJet shares have traded firmly back in cheaper territory for the past couple of years. Back in 2021, the stock looked pretty expensive as sales were decimated amid pandemic travel restrictions.
Currently, the stock has a P/S ratio of 0.41, which suggests it’s a potential bargain at today’s price of £4.82. Generally, any ratio below one is seen as a very…
