I want this stock to grow my ISA in 2026!
My ISA almost doubled in value in 2024, but has come nowhere close in 2025. Ironically, if I had let my winners run, I’d have been a lot closer to doing so.
Anyway, 2026 is a new year, and another opportunity to beat the market and grow my wealth. That’s the plan at least.
So what stock am I talking about in the headline? Well, I’ve got 15 growth-oriented stocks in my portfolio, but one I believe could deliver in 2026 is Jet2 (LSE:JET2).
The stock surged into the early summer, but has now fallen 30% since its highs.
Negative catalysts
Let’s start with why the stock’s fallen. In short, earnings are expected to remain relatively flat over the next couple of years.
There are several reasons for this. Firstly, the budget airline hasn’t been a net beneficiary of the UK’s government economic policies — let’s face it, very few companies have.
Increases to National Insurance contributions and the National Minimum Wage, combined with government mandates for Sustainable Aviation Fuel (SAF), have directly added around £45m (£25m and £20m respectively) to Jet2’s annual operating costs.
Then Jet2 told us that it was concerned by late booking patterns. It said passengers were booking later and this made it hard to forecast demand.
The company is also sacrificing near-term earnings growth in favour of revenue generation and gaining a foothold at the UK’s second busiest airport.
The decision to launch an expensive new base at Gatwick Airport, not expected to be profitable until fiscal 2029, is projected to cause Jet2’s operating profit to be flat in 2026 and decline in 2027, according to Panmure Liberum.
Where the growth?
It’s important to note that Jet2’s 2026 financial year comes to an end in March. So while the next calendar year may be transitional, the company should start to return to earnings growth in calendar year 2027.
In the meantime, revenue growth looks pretty strong, moving from £7.4bn in 2025 to £8.3bn in 2027.
This comes as the company continues to invest in new aircraft. Jet2’s expansion plan is centred on a major fleet transition, replacing the B737 with new, efficient A321neo and A320neo aircraft. This initiative is designed to support the Gatwick growth opportunity.
The new aircraft deliver 23% increased seats, a 20% reduction in fuel and carbon usage per seat, and a cost saving of around £10 per seat.
The fleet size is projected to grow from a maximum of 135 aircraft in 2025 to 161 by 2032, driven by A321neo deliveries. This expansion is supported by capital expenditure that peaks at £1,2bn in 2027, while the average seat gauge will increase from 197 to 223 by 2032.
But the growth of my investment doesn’t come from operational changes alone. It’s all about the stock’s valuation.
And the valuation’s rock solid. The company has £830 in net cash, excluding customer deposits, and trades at just 6.4 times forward earnings. Accounting for cash, it’s trading around four times net income — very cheap. IAG on the other hand is close to 6.2 times.
In short, I believe this stock’s absolutely worth considering.
The post I want this stock to grow my ISA in 2026! appeared first on The Motley Fool UK.
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James Fox has positions in Jet2. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
