EasyJet is (LON: EZJ) set to report its FY 2022 year-end results on Tuesday, providing a look into how it performed as the post-pandemic airline recovery continues.
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There will also be a keen eye on its outlook and how the company sees the current macroeconomic backdrop impacting demand for international travel.
While the challenges for the company this year will have been the cost of living crisis, surging fuel prices, and post-pandemic demand unwinding, we are cautiously optimistic, given recent updates from other airlines.
EasyJet is seen reporting pre-tax losses of approximately £180 million, well below the £1.14 billion losses reported last year, when covid-19 lockdowns and restrictions had a huge impact on the travel industry.
In its trading update for the year ended September 30, the company told investors its performance was “resilient” despite external headwinds, with its headline loss before tax seen between £170 million and £190 million, including an approximate “£64 million FX loss from balance sheet revaluations and incremental disruption costs of c.£75 million, mainly from operational issues experienced across the industry in Q3.”
However, EasyJet noted that the impact of Omicron, the war in Ukraine, and the industry-wide issues experienced in the summer, affected operational performance during the year. Still, in fiscal Q1 2023, it sees capacity at 83% of FY2019 levels and booked load factors ahead of the same point in 2019.
Last week, HSBC analyst Achal Kumar lifted the firm’s price target on easyJet to 380p from 310p, keeping a Hold rating on the shares. Kumar told investors in a note that he believes pent-up demand could underpin growth and average fares could be better in FY23 compared to FY19, driven by a capacity squeeze.
According to the analyst rating website TipRanks, out of seven analysts, three have Buy ratings on EasyJet shares, two have Hold ratings, and two have Sell ratings on the stock. The average price target is 478.04p, representing a potential 18.2% upside from Friday’s close.
EasyJet shares are up 0.37% so far in Monday’s session.