Analysts at Fidelity International reckon that it could still be a tough summer for easyJet (LON:EZJ), even as the budget carrier stood out from rivals with a robust trading statement, Citywire reports. The comments came after the low-cost airline reported yesterday that its total revenue for the quarter ended June 30 had increased by 11.4 percent to £1.76 billion, and noted that it expects to deliver full-year headline profit before tax of between £400 million and £440 million.
easyJet’s share price rallied in the previous session, gaining 4.01 percent to close at 1,076.00p. This morning, the low-cost carrier’s shares have extended yesterday’s gains in early trade, having added 0.65 percent to 1,083.00p as of 08:22 BST, outperforming the mid-cap FTSE 250 index which currently stands 0.31 percent higher at 19,595.80p.
Fidelity International weighs in on easyJet
Citywire quoted Fidelity International analyst Ed Monk as commenting yesterday that fears that easyJet’s update would bear bad news had ‘proved wide of the mark’ as the company posted an 11.8% rise in revenue for the quarter to 30 June, helped by pricing changes and customers buying more additional services such as allocated seating and luggage check-ins. Earlier this week, low-cost rival Ryanair (LON:RYA) cut its passenger growth forecasts.
“easyJet boasted of ‘significantly’ reduced cancellations in the period but it could still be a tough summer with staff at Stansted threatening a strike over pay,” the analyst pointed out, adding that the company had hinted at “air traffic environment remaining challenging”.
Other analysts on mid-cap budget airline
Royal Bank of Canada, which rates the low-cost carrier as a ‘buy,’ set a target on the easyJet share price of 1,300p yesterday, while JPMorgan Chase & Co, which is ‘neutral’ on the stock, set a valuation of 1,000p. According to MarketBeat, the budget airline currently has a consensus ‘hold’ rating and an average valuation of 1,179.14p.
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.