Easyjet’s record profits do not stop share slide

Easyjet shares have fallen significantly today despite the airline reporting full year profits up 18% to £686m.

Easyjet’s record profits do not stop share slide

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By late morning shares had fallen 4.6% to 1701p as negative sentiment on travel and airline stocks took hold and investors decided they were unimpressed by Easyjet’s numbers in this context.

The top five largest shareholders in Easyjet are Blackrock, Standard Life Investments, Invesco, Capital Research and Management Co and Legal & General Investment Management.

It may not be all doom and gloom however with some analysts seeing brighter times to come once the short term negative sentiment passes.

“Summer demand has meant Easyjet’s full year profits are flying sky high as the group reported this morning that basic earnings per share soared by 21.5%, compared to the same period last year,” said Ian Forrest, analyst at The Share Centre.

“Profits before tax were up 18% to £686m, whilst revenues were up 3.5% to £4.69bn. The dividend was lifted 22% and investors should acknowledge that cost savings from lower fuel costs and currency affects have supported the group’s margins.”

“Looking ahead, the company believes it will retain its profit momentum through growing passenger numbers,” Forrest continued. “Subsequently, EasyJet goes into 2016 confident that lower fuel costs, structural cost savings and increased capacity should be supportive of its expectations for the next financial year. The airline sector is a very competitive one and several are adding capacity at the moment. Due to its focus on cost controls, we continue to favour EasyJet in the sector and currently recommend the group as a ‘buy’ for medium risk investors,” Forrest added. 

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