easyJet looking up to the skies as guidance increases

Friday, 28th September 2018 09:21 - by Rajan Dhall

This morning easyJet has provided us with a trading update for the 4th quarter. Here are the highlights:

Full Year Headline profit before tax expectation of £570m to £580m

Despite the impact of disruption, easyJet expects to deliver Full Year 2018 headline profit before tax of between £570 million and £580 million. This is in the upper half of previous guidance.

 Load factor for the full year is expected to increase by 1.0 percentage points to 93.6%.

Total revenue per seat excluding Tegel operations at constant currency for the full year is expected to increase by circa 6.5%

Full Year 2019 unit fuel bill is likely to be £55 million to £105 million adverse. The total reported fuel bill is expected to be c.£1.48 billion

Johan Lundgren, easyJet Chief Executive said 'we have benefited from a number of one-off events in 2018, including the bankruptcies of Monarch and Air Berlin, as well as Ryanair cancellations.'

As you can see from the weekly chart below shares of EZJ have been struggling of late. This could be the catalyst for some consolidation but I am slightly worried about the higher costs and IT issues. I believe we could see a move back to 1400p over some time as it looks like the increase guidance could attract investors. On the downside, the support zone at 1170p is my worst case scenario as if price every got there it would look slightly overstretched.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.