Shares in easyJet (LON:EZJ) are trading in negative territory mid-morning this Thursday, ahead of the low-cost carrier’s half-year results tomorrow. The update will come after blue-chip peer International Consolidated Airlines Group (LON:IAG) recently revealed a drop in first-quarter profits, pointing to fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter which impacted European airlines.
As of 09:12 BST, easyJet’s share price had given up 1.53 percent to 978.60p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.10 percent lower at 7,289.29 points. The group’s shares have given up more than 43 percent of their value over the past year, as compared with about a 5.7-percent dip in the Footsie.
easyJet to post interims
easyJet is scheduled to update investors on its half-year performance tomorrow and IG reports that the airline’s first-half earnings are expected to be a negative, at -56p per share, while revenue is expected to come in at £2.3 billion.
Chris Beauchamp at IG commented in a note last week that growth downgrades had driven weakness in the easyJet share price, “as forecasts have been slashed to see full-year figures hit around 90p per share versus previous forecasts of over 130p per share”.
“Brexit and economic uncertainty continue to weigh on the airline, as the UK economy faces major challenges arising from the decision to leave the European Union,” the analyst pointed out.
In January, easyJet posted ‘a good start’ to the year, reporting that its total revenue in the first quarter of its financial year had increased by 13.7 percent to £1.3 billion.
Analyst ratings update
UBS reaffirmed the low-cost carrier as a ‘neutral’ last week, without specifying a target on the easyJet share price. According to MarketBeat, the blue-chip company currently has a consensus ‘hold’ rating and an average price target of 1,279.35p.