Is easyJet’s sub-£5 share price now a great short-term risk/long-term reward play?
easyJet’s (LSE: EZJ) share price had fallen 16% from its 12 December one-year traded high of £5.90.
This does not necessarily mean that it is now a bargain. It does not even necessarily mean it is more of a bargain now than it was before.
The reason why is that a stock’s price is a different measure to its value. Price is just the level the market is willing to pay at any given time. But value reflects the true worth of the underlying business.
So to ascertain whether it is, in fact, a bargain, I thoroughly examined the value proposition here.
The most effective method I have found to establish any stock’s fair value is discounted cash flow analysis. This identifies the price at…
