For the first 6 months of 2018 the airline was flying pretty high, climbing from an opening price of £14.59 to a 2 and a half year peak of £18. Yet having struck that level the stock started to nosedive, eventually tumbling all the way to an 18 month low of £10.62 in late October. It has bounced back a bit since then, but not by much, with easyJet PLC now at a current trading price of £12.59.
The firm’s last update came at the end of September, as easyJet gave investors a taste of what to expect from Tuesday’s full year statement. Excluding the Tegel operation in Berlin, passenger numbers are expected to rise 5.4% to 84.6 million, with total reported revenue (again sans Tegel) set to come in at £5.895 billion, a 16.8% increase year-on-year. Headline pre-tax profit, meanwhile, is forecast to arrive between £570 million and £580 million, a substantial increase on FY17’s £408 million.
However, none of this was enough to halt easyJet’s decline, as investors took umbrage with rising fuel costs. The figure for 2018 expected to be £15 million higher than forecast at £1.185 billion, with another £55 million to £105 million added onto 2019’s guidance, taking it to just shy of £1.5 billion. It also warned of the negative impact of foreign exchange movements, and a H1 decline in revenue per seat due to the removal of one-off benefits like the collapse of Monarch and Air Berlin (F:AB1), alongside the gains made due to Ryanair's (LON:RYA) winter cancellations.
In terms of Tuesday’s results, investors will want that pre-tax profit figure to closer to the £580 million end of forecasts. Yet the market reaction might actually be more dependent on any revisions to its 2019 guidance, given how September’s update was greeted. Any word on its revised bid for Italy’s Alitalia will also be welcome.
EasyJet PLC (LON:EZJ) has a consensus rating of ‘Hold’ alongside an average target price of £16.36.
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