During the first few minutes of trading today (8 July), the Jet2 (LSE:JET2) share price soared 10%. Why? Investors seemed pleased with the airline and holiday group’s results for the year ended 31 March 2026 (FY26).

Encouragingly, these disclosed record annual passenger numbers and revenue. And the group reported a 0.5% year-on-year increase in diluted earnings per share to 208.2p.

The publication of these numbers is timely. It comes just two days after easyJet said it had reached an “agreement in principle” to be bought by a US investment firm. But what could this deal mean for the Jet2 share price? Let’s take a closer look.

Takeover fever

Castlelake has offered 690p a share for easyJet. The fact that the orange airline’s share price is comfortably below this level suggests that investors are sceptical whether the necessary regulatory approvals from the European Union’s competition authorities will be obtained.

However, the American investment firm clearly believes that easyJet’s worth £5.5bn, which is 3.8 times its EBITDA (earnings before interest, tax, depreciation, and amortisation) for the year ended 30 September 2025.

Apply this multiple to Jet2 and it would be valued at £2.8bn or 1,485p a share. Following this morning’s share price bounce, this is roughly where the group’s market cap currently sits.

On the surface, it would appear as though the group’s shares are now fairly priced and suggests there’s limited further potential. But a closer look at its results reveals that Jet2’s in pretty good financial shape.

What do the numbers show?

Against a difficult geopolitical backdrop, its package holidays business, which accounted for 80% of FY26 revenue, performed well. Revenue increased by 3.3%.

Significantly, following the US-Iran (admittedly shaky) ceasefire, the group’s seen “strong booking momentum in recent weeks” with summer passenger numbers and its load factor higher than a year ago. Looking further ahead, Jet2’s seeking to increase its capacity and has 146 Airbus A321s on order.

Importantly, its balance sheet remains strong with a net cash position of £2bn. Its using some of this to fund a £250m share buyback programme.

Perhaps it could become a takeover target itself? Who knows.

But from an operational perspective, the airline industry is a tough one. The pandemic reminded us of this.

And although Jet2 buys a significant proportion of its requirements in advance, it’s vulnerable to higher jet fuel prices. During the Iran war, the cost of fuel more than doubled and nearly reached an all-time high.

My view

In my opinion, Jet2 is a decent business.

Yet its share price hasn’t really gone anywhere during the past five years.

It seems to be one of those stocks that, on paper at least, should be doing better. Unfortunately, its dividend isn’t attractive enough to compensate for this disappointing share price performance.

But I reckon there are easier ways to make money. There are plenty of other industries where the return on capital is higher. And this probably explains why investors appear lukewarm. Could today’s results tempt me to take a position?  

To be honest, the airline sector isn’t exciting me at the moment, which is why I’m ruling out an investment in Jet2 right now. In my opinion, its share price is currently where it should be.

I think there are better opportunities to consider elsewhere.

Should you invest £5,000 in Jet2 Plc right now?

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James Beard does not hold any positions in the companies mentioned.