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4-Traders Homepage  >  Equities  >  London Stock Exchange  >  EasyJet plc    EZJ   GB00B7KR2P84

Delayed Quote. Delayed  - 06/28 05:35:22 pm
1069 GBp   +4.80%
06/28 IN THE KNOW : Liberum Cuts EasyJet To Hold, Slashes Target After Bre..
06/28 EASYJET : Response to result of UK referendum on membership of the E..
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IN THE KNOW: Liberum Cuts EasyJet To Hold, Slashes Target After Brexit

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06/28/2016 | 03:54pm CEST

LONDON (Alliance News) - Liberum cut its recommendation on easyJet to Hold from Buy, after the low-cost airline issued a profit warning on Monday saying revenue per seat will be hit in the second half of its financial year following the outcome of the UK's European Union referendum.

The UK's decision to leave the EU will contribute to further economic and consumer uncertainty this summer, easyJet said, leading to an expected mid-single digit fall in revenue per seat at constant currency in the second half of the financial year, year-on-year.

Shares in easyJet fell by 23% on Monday following the profit warning, adding to the declines seen after the Leave camp win was announced on Friday morning.

The stock hit Monday a low of 990.00 pence, a level it hasn't seen since March 2013 and remains down 31% since the London equities close Thursday.

easyJet shares were trading Tuesday afternoon up 6.4% at 1,084.00p, recovering some of the ground lost albeit still far from the levels pre-referendum.

Aside from the downgrade, Liberum significantly cut its price target on easyJet to 1,050p from 1,950p as the "uncertainty trumps an attractive valuation".

"Post-Brexit international traffic rights remain to be clarified. We expect a benign outcome similar to the status quo, and easyJet has options to cope with a worse outcome," noted Liberum analyst Gerald Khoo.

Alongside the impact from the EU referendum outcome, the low-cost airline said it has experienced 1,061 cancellations so far in the third quarter to the end of June, due to a significant number of disruptive events including air traffic control strikes in France, runway and congestion issues at Gatwick airport and severe weather conditions.

Those incidents, together with the Egyptair tragedy when an Egyptair plane heading for Cairo from Paris crashed into the Mediterranean, have resulted in lower consumer demand and hit third-quarter pretax profit by around GBP28 million year-on-year, easyJet said, while also reducing revenue per seat by around 1.6 percentage points.

easyJet will provide a third-quarter trading update on July 21.

By Daniel Ruiz; danielruiz@alliancenews.com

Copyright 2016 Alliance News Limited. All Rights Reserved., source Alliance News

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