Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
BA, TUI and easyjet have all cancelled a lot of flights, though EZJ seems to have cancelled more than the others. My guess is that the cancellations are down to the traditional reason for flight cancellations - not enough passengers. It's obvious that an 'IT glitch' doesn't cause an airline to cancel just 24 flights a day for 10 days. This loss of business (although its business that never existed in the first place) will blow a hole through the CEO's claim to be flying 97% of 2019 capacity. On top of that, there is the cost of compensating potentially thousands of customers, the loss of trust amongst easyjet customers, who will now look to Ryanair instead, the terrible publicity being broadcast every day with sad stories of families sleeping on airport floors and losing several days from their 'dream holiday' and the straight-forward loss of revenue. My guess is that despite all the claims about airports being 'busy like it's 2019' there will be another big loss-making quarter, possibly £100m to £200m down again.
EZJ is valued at about £4bn but continues to produce no profit and merely adds to its indebtedness. I reckon fair value here MIGHT be about £2bn, which translates to about £2.50 a share. It might be a few months before the market agrees with me, but all credit to Johan for keeping the market cap and shareprice up close to 2019 levels for now, despite endless bad publicity, disgruntled customers and huge losses. He is walking on water imv.
There's a 'capital markets day' in three weeks when Kier gives presentations to investors on how the business is doing. Inflation took a slug out of the profits for H1 but Kier still turned a profit of £12m before tax. They pass most cost increases onto customers according to management. In 3 weeks we will get a view on how they're managing. Then about nine weeks after that we get the full year numbers and four five weeks after that the annual report. Somewhere along the way the A417 contract should get the planning green light. Plus there's whatever other contract announcements to come in the meantime. There should be fairly regular newsflow for a few weeks. Hopefully all positive.
Of course the elephant in the room is Putin, but if the Ukraine war ends or the Ukranians force the Russians out, there should be a pretty big recovery in the risk shares, Kier being one of them. Last week could be the low point for the shares, though the fact that some on here have said that they are thinking of selling might be a sign that we haven't actually reached capitulation yet. Regardless of that, the forecast p/e ratio is very, very low. Around 3, for a business that showed £54m adjusted profit in the January first half results.
Obviously everything could just get worse, Putin could declare all out war, invade Moldova, the A417 could get cancelled, inflation may have wiped out all of the profit for H2, but considering that Kier is no longer a distressed business, loans don't mature until 2024 and the business has the working capital it needs, I'm not sure that the sp will won't go much lower.
One thing that does keep occurring to me - when will this business actually catch a break? First Brexit costs, then a global pandemic (more massive costs), and now a major European war (inflation). When will something go right? Despite all of that, Kier is still the second largest UK construction firm by contract value. It seems to be a survivor.
Yes, the real picture will emerge next month. How many customers is easyjet flying and at what cost (ie nearly empty aeroplanes)? 2022 will be another wipe-out. Sp target, £2.80. GLA, DYOR and stay well. Try to avoid contracting the debilitating brain disease that has overwhelmed the spotty, limp, septic 'comedy' trio on here.
northspot, you've been saying that for months and the sp keeps heading down. Keep on dreaming.
limpy, avocet and northspot - a comedy trio, living in a dreamworld. Keep it up kids.
What a recovery today - actually turning positive on the first trading day after a weekend when several European countries banned UK tourists and the UK slipped into an unofficial lockdown, while covid cases went off the charts and the first omicron deaths occurred. Plus cheap money era brought to an end by the first of many interest rate rises last Thursday. Maybe all of this is actually good for easyjet. (Now I know what's wrong with northscot.)
Don't worry everyone, normal service will be resumed. easy is a traders' toy just at the moment, but the fundamentals can't be denied for long. Back into the £4s by the close and then downward - that's my guess. GLA and stay well.
alouette, you constantly misrepresent my position. I am not 'preaching doom', I am preaching 'less than £3 for easyjet shares'. As for your comment about being in the red on so many other shares; given the irrational nature of your warblings on here, I am not at all surprised to learn about your 'achievements' elsewhere. I'm sure you'll forgive anyone for not having much faith in your predictions for easyjet, since you seem to be something of a serial loss-maker.
And as for me 'waiting weeks' - I know you'd prefer it if I didn't post here and make you look foolish, but I reserve the right to let everyone know when they are being misled. Sorry about that.
Regarding covid being in the 'end stages' - since you are plainly not a virologist or an epidemiologist or any kind of expert on such matters, I'm sure you'll understand if I treat your strident pronouncements about public health, on this obscure share-trading forum dedicated to easyjet, with the respect that they deserve. Sleep well.
avocet, your hope that omicron gives protection against delta is, so far, completely without evidence. It would be great if omicron were to delta, what cowpox was to smallpox, but it will be a long while before we know whether that is the case.
But even if covid were eliminated tomorrow, easyjet still has over a billion in debt which it didn't have before, and it will take several years to pay that down to a point where dividends can be re-instated. Also, don't forget that 2019 was the busiest year for aviation EVER. During that year, easy made £350m. The permanent loss of a large chunk of business travel will mean that it will be years before easy handles that level of volume again. Imv, you are simply deluding yourself (and others) because you've got into a loss-situation with easy. GLA and DYOR.
Very difficult to see a ban by France on travel to and from the UK as being positive for easyjet. FRANCE!!! Our neighbour and occasional friend/foe/ski-partner/city-break-jolie. Whatever next? Italy?
https://news.sky.com/story/covid-19-british-tourists-to-be-banned-from-france-amid-rise-in-omicron-cases-12497105
British tourists are to be banned from France amid concern over the "extremely rapid" rise in Omicron COVID cases in the UK.
From Saturday morning, France is barring travel to and from Britain without "compelling reasons".
Those reasons do not include tourism and business, Paris said.
'Green boxes out in force'?? I'd only posted two messages! And considering I'm the only person on here calling this share correctly, I'd say my contribution is pretty much essential to counter the shameless ramping from con artists and liars. Seriously northscot, as soon as I post, you start throwing a fit! I think you're a bit over-sensitive to any contrary views or information. Let me remind you, this is a free chatboard on easyjet. I suggest you calm down. And besides, according to you, you've sold out of easyjet - I really don't know why you're advising other investors to stay in. Seems a bit hypocritical to me. Unless perhaps you're fibbing about that. For the REAL investors, good luck and have as good an evening as you can, given the situation here. Hedging might be an option, but please DYOR.
Yep, huge pent-up demand for selling easyjet shares. Easy's 2022 year has already started and the Q1 trading update will be out in about four/five weeks, so it will be starting the year with another big loss. Q2 isn't likely to be much different. Easy lost £400m in the last six months of last year, flying over half its capacity, so I won't be surprised to see the same kind of numbers for H1. That will probably result in net debt climbing to £1.3bn. A third rights issue later in the year will perhaps bring that down, but eventually investors will lose patience and leave in droves, and there will be a precipitous fall in the sp. Be ready for some steep losses if you're long.
Well, here we are, back in the £4s as I said we would be, on our way to £3. avocet, I hope you can find some comfort in the words of the 'analysts' punting easyjet shares, but they have been wrong for a long time now and we are not even in distressed territory yet.
How much should a company be worth if it can only make a loss this year, but MIGHT make a moderate profit in 2023? My guess is that easy's market cap might be worth 10 times future earnings of say £200m, so about £2.0bn, which means that fair value for 758m shares here might be around £2.80 each. There's a lot further for this share to fall, in other words, imv.
Regarding treacle's predictions for the virus; I understand why you're looking at South Africa, but the real issues are in Europe already with delta. 1,300 people died in Hungary last week and the entire population is only 10 million. That's a death rate about 8 times higher than the UK's for covid. Poland is suffering similarly. The death rate is now creeping up in Italy and France. Across Europe countries are in lockdown measures or restrictions and travelling on an aeroplane is the last thing on most people's minds.
It will take at least a fortnight for meaningful data to come out of the UK's omicron experience, but whatever it is, Europe is still in turmoil and omicron will only make it much worse before it gets better.
For easyjet, Q1 and Q2 are a loss-making wipe-out and Q3 MIGHT be the time when Europe starts to come back to life, but Q3 will still be a slow recovery period imv. Who knows how Q4 will turn out, such are the twists and turns of this pandemic? My guess is that there will be no good news now for at least a fortnight, maybe longer, so the sp will slowly dribble down to sub-£4 short-term. Good luck all and DYOR.
One more thing - the easyjet shareprice chart gave a short signal on Friday. Here's the verdict from British Bulls today:
https://www.britishbulls.com/SignalPage.aspx?lang=en&Ticker=EZJ.L
Signal Update. Our system’s recommendation today is to STAY SHORT. The previous SHORT signal was issued on 10/12/2021, 3 days ago, when the stock price was 527.7300. Since then EZJ.L has fallen by -4.53%. Market Outlook. The bears have recovered and our bearish bet continues. Besides, the signal is suggesting to STAY SHORT. It is best to follow the signal and continue to STAY SHORT.
Sandbar Asset Management are really going for easyjet now; they increased their short to 0.92% of the shares on Monday, adding more than 10% to their short position. Unlike the 'analysts' that avocet likes to quote on here, Sandbar have put real money behind their position and real research into their decision-making. The pressure is building up on easy. The January update looks like a real crunch-point for the shareprice but the rising tide of hospitalisations , even without deaths, will be negative, not to mention the existing tragedy in Europe from delta. Longs will need deep pockets and nerves of steel to live with the losses imv. GLA and DYOR.
That's easyjet caught between BA's rock of a brand and Ryanair's hard-place of discount fares. Hard to see a way through for easy currently. GLA and DYOR.
As I said, a muted reaction to restriction changes. A bigger story is here in British Airways launch of its budget service from Gatwick, right in easyjet's face so to speak. As I mentioned a few posts back, easy won't have the skies to itself when the recovery eventually comes, and much of the 'pent-up demand' will get snatched away by rivals. Then resorts will become full and that capacity will be spent. Here's today's news story at Gatwick, a very aggressive move by BA imv, designed to kick easy while it's down:
https://www.dailymail.co.uk/news/article-10308121/British-Airways-launches-new-short-haul-airline-Gatwick-serving-35-holiday-destinations.html
British Airways launches new short-haul airline at Gatwick to rival easyJet that will start serving 35 holiday destinations from March next year.
- British Airways will create subsidiary airline for short-haul flights from Gatwick
- Airline suspended all flights from Gatwick at beginning of pandemic last year
- Subsidiary will serve 35 destinations including Athens, Ibiza and Marrakech
- Tickets are available from £39 each way and flights will begin in March 2022
avocet, I don't think the 800+ UK families who lost someone last week with covid, or the 800+ the week before that, or the 800+ the week before THAT one, will agree with you when you say that covid is over. If you could jump on an easyjet flight to Poland, Hungary, Austria, Germany or practically anywhere in Europe, you will find the same situation or worse in those countries too. Regardless of what happens to travel requirements (and they will likely CHANGE, rather than be removed entirely) people all over Europe are hunkering down, rather than planning a holiday.
The pandemic WILL end, but not yet. In a week or two, a lot more will be known about the real-world impact of omicron and maybe it will be possible to make some reasonable predictions then, although as I'm sure you will agree, covid has not turned out the way anyone thought it would, so there might be yet more twists and turns from the virus.
No one has filtered me; not even northspot (he can't resist taking a peek and he keeps responding to my posts). Anyway, as usual, another down day for easy. £4s tomorrow most likely. GLA and DSFR!!!!
A spike forecast by northspotty-kid? Everyone be aware, that when spotty says 'coming shortly' he means in 2025. The only spikes here for the forseeable will be heading downwards. And maybe it will be 65p. Buckle-up kids. AND DYOR instead of listening to the echo-chamber!!!! GLA.