Investors eagerly await easyJet’s annual targets and future goals, as the airline’s share price has soared over the past year. While the stock price has seen a remarkable 52% increase, there have been moments of concern, including disruptions caused by National Air Traffic Services (Nats) during the summer.
In August and September, numerous easyJet flights were affected by Nats failures, leading the airline’s CEO, Johan Lundgren, to express disappointment in Nats for letting down customers. Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, warned that investors should not discount potential disruption from air traffic control constraints due to strike action. Understanding the impact on easyJet’s bottom line will be crucial, although it should not be viewed as a long-term indication of the company’s health.
Looking ahead, analysts are curious about the booking momentum as the new financial year approaches. With ongoing cost-of-living pressures, the resilience of the travel sector is gaining scrutiny. Energy prices, in particular, have contributed to these pressures. The gradual rise in oil prices in recent months may explain why easyJet shares have slightly declined by about 10% in the past six months, despite an earlier rapid rise.
Russ Mould, investment director at AJ Bell, noted that the loss in altitude for easyJet’s share price could be attributed to the resurgence in oil prices. Fuel is a significant input cost for airlines, and higher energy prices can also impact consumer spending. Mould added that investors will be eager to hear any profit forecasts from CEO Johan Lundgren for the 12 months leading up to September 2024. However, Lundgren might prefer to wait until the full-year results are announced in late November before providing any forecasts.
Currently, analysts’ consensus forecast anticipates a further increase in easyJet’s pre-tax profit to £552 million. Despite this projected growth, it would still fall short of the airline’s all-time high of £686 million in 2015, which could explain why the share price has not reached its peak from that period.
As easyJet prepares to disclose its annual targets, investors will closely monitor the airline’s performance amid previous disruptions and factors impacting the travel industry. The financial health of the company, alongside its ability to navigate challenges and sustain growth, will be significant considerations for investors and analysts alike.
More detail via Evening Standard here… ( Image via Evening Standard )
