Numis welcomes "encouraging" Q1 update from Easyjet, maintains 'buy'

Broker Numis Securities said it expects upgrades to consensus estimates for Easyjet after the budget airline impressed the market with its first-quarter update and positive outlook on Tuesday.Easyjet said seats flown rose 2.9% year-on-year in the three months to 31 December 2014, while passengers carried increased 4.1%. As such, revenue per seat improved by 3.7% at constant currency to £56.16.The company raised its guidance for first-half revenue-per-seat growth to 2%, from previous guidance of "flat to very slightly up".Meanwhile, guidance for a £90m-130m reduction in the full year fuel bill was better than the earlier expectation of a £22m-70m decline. Some of this benefit is likely to be given back to customers via lower fares, Numis said.Overall, the broker said the statement was "encouraging with the yield performance notably strong".Numis doesn't expect to change its forecast for pre-tax profit of £693m for the year ending September 2015, but said that consensus at £637m would likely increase."In our opinion, investors should be encouraged by a positive outlook statement in which management points out that it sold record numbers of seats to business travellers in the first quarter and that Easyjet is well positioned to continue to deliver strong returns and growth to shareholders."Numis maintained a 'buy' recommendation and 2,100p target price for the stock, which was up 3.3% at 1,814p by 11:04.