easyJet share price: what to expect from its Q3 results

The low-cost carrier is on track to hit its 2019 profit target, but some analysts have downgraded its stock ahead of its Q3 results after its peer Lufthansa reported weaker than expected short-haul revenue earlier this year.

When is easyJet’s results date?

easyJet will unveil its Q3 results on July 18.

easyJet’s results preview: what does the City expect?

In its half-year results, easyJet reiterated that its pre-tax profit expectations for 2019 remain unchanged and in line with market expectations.

But that has not stopped some investment banks downgrading the low-cost airline’s stock ahead of its Q3 results next week, with HSBC changing its rating from ‘hold’ to ‘reduce’ last month.

The bank offered a disappointing review of the European airline sector following German carrier Lufthansa’s profit warning on June 17.

‘With the March quarter results, European low-cost carriers and tour operators offered quite cautious revenue commentary,’ HSBC analysts said in a note to investors.

‘With its 17 June profit warning, Lufthansa flagged very weak short-haul revenue trends in Q2, markedly worse than it described at its end-April Q1 report.’

‘This comes despite the benefit of Easter and European capacity growth of only 4%, the lowest seen in Europe since the Global Financial crisis. Indeed, airline supply has only recently tightened with the 737 Max grounding.’

In its half-year results, easyJet conceded that revenue per seat in the second half of the year is expected to be slightly down, with the airline negatively impacted by Brexit-related market uncertainty as well as a wider macroeconomic slowdown in Europe.

easyJet issues €500 million bond

easyJet issued €500 million worth of bonds under its Euro Medium Term Note (EMTN) programme on Thursday.

The bonds mature in June 2025, have a coupon of 0.875% and are expected to be rated Baa1 (stable) by Moody's and BBB+ (stable) by Standard & Poor's, with over 150 pan European investors participating in the issue.

‘We are pleased with the success of this bond issue,’ easyJet CEO Andrew Findlay said.

‘The interest shown by investors at 3.4x oversubscription and competitive pricing underscores the market's confidence in easyJet's strategy of long-term profitable growth and industry leading balance sheet strength.’

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