easyJet eyeing all-time high

easyJet will announce its October sales numbers on 5 November, and the airline is set to finish on a high note after having a good first half. 

An easyJet logo on an engine
Source: Bloomberg

easyJet got off to a flying start this year as the airline announced a first-half profit in May, its first profit for the six-month period ever as the company depends heavily on the summer season. The company had record profits in 2014, and the excellent start to this year is why traders are anticipating another set of record annual earnings.

As I previously stated, easyJet is tapping into the business travel sector instead of just focusing on the budget customers. Competition is heating up between the airlines as the new nice guys of the sky Ryanair are winning back previous customers, and this is forcing easyJet to keep its fares low and customer service levels high.

The third-quarter trading update from easyJet stated that both capacity and the number of passengers grew by single-digit amounts. While the slump in the oil market is helping easyJet there are external factors that may hold back the second-half figures, like the fire at Rome Fiumicino airport.

The company will report its full-year results on 17 November, and analysts are anticipating revenue of £4.71 billion and adjusted net income of £544 million. These forecasts equate to a 4.2% rise in revenue and a 20.8% rise in adjusted net income. The airline will also reveal its second-quarter figures on the same date, and dealers are expecting revenue of £2.95 billion and adjusted net income of £517 million, compared with the first-half revenue and adjusted net income of £1.76 billion and £5 million respectively.

Investment banks are very bullish on easyJet, and out of the 27 recommendations, 19 are buys, four are holds, and three are sells. The average target price is £19.83, which is 15% above the current price. Equity analysts are also very bullish on rival Ryanair, and out of the 26 ratings, 19 are buys, five are holds, and three are sells.

easyJet’s share price has risen sharply since 2012 and the resistance at £19.28 is the target; a move through it will bring £20 into sight. Should the stock drift lower it will provide a buying opportunity, and support will be found in the £16.50 area and then at £15.20.  

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