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Jet2 (LSE: JET2) remains listed on the AIM (Alternative Investment Market) — at least for now. With strong earnings momentum, a net cash position, and a market capitalisation approaching FTSE 100 territory, analysts increasingly believe the company could be a future candidate for the blue-chip index. The issue is, it’s not listed on the main market.
Jet2 shares currently trade at 1,628p, but the average analyst target price is 2,164p. That almost 33% up from current levels. The highest target, 2,500p, implies 54% potential appreciation. Among the 12 analysts covering the stock, the consensus is firmly in Buy territory.
What’s driving the optimism?
Valuation and net cash position
Jet2’s forward valuation looks undemanding. The shares trade on just 7.8 times forward earnings for 2025, falling to 7.1 times in 2026 and 6.4 times by 2027. That places it well below the broader travel sector average. That’s despite being one of the most exciting companies in the space.
On an enterprise value-to-EBITDA basis — which adjusts for net cash — the stock looks even cheaper. EV-to-EBITDA is just 1.48 times in 2025, declining to 0.98 times in 2026. For context, many global peers in the leisure and aviation sectors trade around 4-8 times on this metric. IAG, for example, trades around 3.7 times.
A key part of the valuation appeal lies in Jet2’s net cash position. Net cash is projected to rise to nearly £2.5bn by 2026. That gives Jet2 an unusually clean balance sheet in a sector often burdened with high debt levels. It also significantly compresses its enterprise value and supports its ability to invest, expand, or return capital.
Operational progress
Operationally, Jet2 has managed to balance lower fuel costs with growing labour costs. Jet2 faces a £25m hike in annual employment costs as a result of changes announced in October’s Budget.
Management had budgeted for rising employment costs, while benefiting from more favourable jet fuel pricing. Earnings are expected to grow steadily, with EPS forecast to rise from 207p in in 2025 to 254p by in 2027.
There are, of course, risks. Labour costs could escalate faster than expected, and any spike in oil prices would compress margins. Additionally, consumer confidence remains a key variable, especially with higher-for-longer interest rates.
FTSE 100 in sight?
Well, it’s certainly possible to imagine Jet2 on the FTSE 100.
With a current market cap of £3.3bn, Jet2 isn’t yet large enough for FTSE 100 inclusion. However, analysts see 33% appreciation from current levels to reach fair value, which would imply a valuation of around £4.4bn. That would place Jet2 well above the typical £3.5bn–£3.7bn threshold for entry into the index — assuming it were listed on the main market.
With strong fundamentals, attractive valuation, and a net cash buffer, Jet2 looks increasingly ready for the big league. It’s a part of my portfolio and I believe investors should give it plenty of consideration.
This story originally appeared on Motley Fool
