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Taking off in early 2019, rising from £11.33 to £13.50 by the end of February, the easyJet shares hit some Brexit turbulence in the last couple of months.

At the start of April it had briefly fallen under £10, returning above £12 less than 3 weeks later, before pulling back to a current trading price of £10.41.

A big part of the company’s early climb was prompted by January’s Q1 results. While total revenue jumped 13.7% to £1.296 billion, fuelled by an 18.2% increase in capacity and a subsequent 15.1% rise in passenger numbers, total revenue per available seat actually dropped 4.2%.

This as an underlying 1.5% increase was negated by the ‘dilutive impact’ of first time flying in Q1 at Berlin Tegel, one-off benefits from 2018 – like the Ryanair cancellations saga – not being repeated, and issues relating to the Gatwick drone debacle. Talking of Gatwick, the drone scandal cost the company £10 million in customer welfare costs, on top of the £5 million in lost revenues.

Crucially, easyJet also stated the despite ‘consumer and economic uncertainty created by Brexit’, demand remains ‘solid’ and forward bookings past the then-exit date of March 29th were ‘robust’. It also claimed it was ‘well-prepared’ for the UK leaving the EU.

In terms of Friday’s half year report, easyJet is expecting revenue per seat at constant currency to decrease by ‘mid to high single digits’, due to the shifting of Easter into H2, a ‘more competitive market in Berlin’, and the greater than anticipated ‘phasing impact from H1 to H2’ of new IFRS 15 accounting standards.

Any further word on its Brexit preparations, given the shifting state of play politically, will also be welcome.

easyJet shares have a consensus rating of ‘Hold’ alongside an average target price of £12.79,

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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