Will Carolyn McCall's Update Leave EasyJet To Sink Or Soar?
Spreadex | Nov 20, 2017 11:13
Will Carolyn McCall leave easyJet (LON:EZJ) to sink or soar when she reveals her last annual update as CEO on Tuesday?
It’s been a tale of two halves for the airline. For the first 7-ish months of the year, easyJet was riding high, climbing from an opening price of £10.10 to a 13 month peak of £14.40 by mid-July. From that point onward, however, its performance has been far from stable.
By early September the stock had fallen all the way back below £11.50, as the company was hit, among other things, by the shock news that CEO McCall was set to the leave for ITV (LON:ITV). Since then the things have picked up, though it is a way away from its July highs, with easyJet PLC now sitting at a current trading price of £12.95.
The airline’s most recent update came near the start of October. Then easyJet posted a 3.7% drop in the crucial revenue per available seat metric for the fourth quarter, meaning it fell 1.4% for the second half of the year as a whole. In better news, Q4 saw a record high load factor of 95.6% after it attracted a similarly all-time high 24.1 million passengers for the period. As for its profit guidance, the company stated the figure would be at the upper end of estimates, between £405 million and £410 million (that’s compared to the £495 million managed the previous year).
In terms of its full year figures on Tuesday, analysts are expecting easyJet is to spoil a 7.3% surge in revenue to £5 billion with a slightly greater than forecast 18.9% plunge in pre-tax profit to £401.3 billion. The company will likely to point the finger at a combination of the weakened pound and a heated airline price war as the reasons for the drop.
EasyJet PLC has a consensus rating of ‘Hold’ alongside an average target price of £12.46.
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