easyJet Flies Higher After Encouraging Results
Fiona Cincotta July 18, 2019 3:34 PM
A double whammy of good news sent easyJet flying up the FTSE leader board. Strong Q3 results combined with news of poaching Peter Bellew as Chief operating officer from rival Ryanair sent shares 2% higher when the broader market was in decline.
A sharp increase in late bookings, which are usually more expensive has provided some relief for easyJet in what has become an increasingly challenging environment. Investors had been fearing that easyJet would have to warn on profits, particularly after May’s half year results made for dismal reading.
European carriers have seen margins squeezed owing to a glut in capacity across the region and as Brexit uncertainty has put holiday makers off booking another foreign excursion. With a lack of major sporting events and overall demand trending lower some carriers are struggling. there is no getting away from Brexit and the potential disruption that a disorderly exit from the European Union could have on easyJet. This has weighed on the price of the share which has lost 60% in 12 months.
However, today’s results and appointment could offer support to the price of easyJet shares. As will the fact that rival Ryanair will be cutting flights next summer because the grounding of Boeings 737 Max jets will delay the delivery of Ryanair’s new Max 200 aircrafts. easyJet, as an Airbus only fleet will be unaffected. Below the Brexit headwinds is hasn’t all been bad news, easyJet is still managing to grow its underlying business, whilst others fail. easyJet could emerge stronger after a difficult period for the aviation industry.
Analyst Price Target -1124.4. This offers 5.5% upside.
Levels to watch:
easyJet is trading below its 200 sma but above its 50 and 100 sma on the daily chart. Support can be seen at 1000p. A break above 1100p could indicate a stronger move higher towards 1200p.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.