Equities Transport and Tourism

easyJet share price flies lower ahead of Q3 results

easyJet’s (LON:EZJ) share price has slipped into the red in today’s session, with investors awaiting the low-cost carrier’s third-quarter results tomorrow. The update will come after budget peer Ryanair (LON:RYA) cautioned yesterday that as a result of  the current uncertainty over the Boeing 737 MAX deliveries, it was cutting its 2020 growth rate from seven percent to three percent.

As of 09:01 BST, easyJet’s share price had given up 0.62 percent to 1,043.00p, underperforming the broader UK market, with the FTSE 250 benchmark currently standing 0.06 percent higher at 19,668.25 points. The group’s shares have given up more than 37 percent of their value over the past year, as compared with more than a five-percent fall in the mid-cap index.

easyJet results preview

easyJet is scheduled to update investors on its third-quarter performance tomorrow and Proactive Investors reports that Berenberg expects revenue per seat to have dropped 5.5 percent versus the prior-year period, while cost per seat is forecast to have improved a little, largely due to fewer strikes.

“We expect the company to set its FY 2019 [pre-tax profit] range below the most recently guided c£435-million level,” the broker pointed out. “We estimate £408 million, slightly below the current consensus of £417 million. Our estimate implies a c£90 million H2 improvement year-on-year.”

The update will come after easyJet posted a loss for the first half of its financial year in May, while saying that that its headline profit  before tax expectations for the financial year 2019 remained unchanged and in line with expectations.

Analyst ratings update

Barclays reaffirmed its ‘underweight’ stance on the low-cost carrier this week, without specifying a target on the easyJet share price, while Morgan Stanley continues to see the company as an ‘equal weight’. According to MarketBeat, the budget airline currently has a consensus ‘hold’ rating and an average valuation of 1,179.14p.

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