Key Takeaways
- The easyJet share price rose on news of an agreed purchase bid by Castlelake.
- Morningstar analysts say the deal, which would take easyJet private once more, is likely to go through, with a 70% chance of completion.
- EasyJet stock is fairly valued according to Morningstar analysts, and in three-star territory.
Ollie Smith: EasyJet’s EZJ share price is on the rise, and it’s all because of a takeover deal by US alternative investment house Castlelake that looks set to privatize the UK’s biggest low-cost airline and hand long-term investors a premium on their patience.
This comes after easyJet’s board previously rejected four prior bids on the grounds they were “opportunistic.” So what’s going on, and will the deal go through?
Why Is the easyJet Share Price Rising?
After a flat 2024 and 2025, the easyJet share price is on course for a much better 2026. EasyJet stock has climbed about 19% in the year to date through July 7, positioning it for its best annual gain since 2023, when it climbed 57%. On 6 July, when the airline agreed to Castlelake’s £6.90p-per-share bid, shares in easyJet rose around 10% to £6.12. The last time the easyJet share price was at that level, its stock was falling as a result of covid disruption and flight groundings.
The deal comes amid “temporary headwinds,” however. These include oil price volatility because of the Iran war and delivery delays in easyJet’s fleet replacement program– not to mention the possibility that easyJet would be outflanked by its extremely price-competitive peers Ryanair RYA and Wizz Air WIZZ. In June, Morningstar equity analyst Loredana Muharremi said these issues were holding the company back. On that basis, she now says the bid price is attractive and assigns a 70% probability to the deal going through. Castlelake will have to submit a firm and fully-funded offer by Aug. 3 to meet regulatory requirements.
Should I Buy easyJet Stock Now?
Notably, the share price bump that accompanied news of a deal pushed the easyJet stock price above Morningstar’s fair value estimate of £5.74. With shares trading around the £6.10 mark, easyJet shares earn a Morningstar three-star rating and appear fairly valued. That might not make them attractive to new buyers, but it certainly means that investors who have been waiting many years for good news from easyJet might not be in a holding pattern for much longer. For Morningstar, I’m Ollie Smith.
