EasyJet shares jump as analysts eye profit boost from falling fuel costs
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EasyJet shares rose on Tuesday after a broker issued an upgrade on expectations that the airline's profits will benefit from lower fuel costs next year. Peel Hunt upped EasyJet's target price from 850p to 900p, reflecting forecasts for pre-tax profits to grow by 3 to 5 per cent in the 2025/26 financial year.
EasyJet's headline pre-tax profits jumped by more than a third to £610million in the 12 months ending 30 September, thanks to rising passenger demand and the popularity of its package holidays. A total of 89.7 million people travelled with the airline, an 8 per cent year-on-year increase, as consumers prioritised spending on vacations amidst widespread cost-of-living pressures.
There was a 36 per cent surge in customers booking with EasyJet Holidays, which helped the package holiday division's turnover climb by 47 per cent to around £1.1billion. Flying away: EasyJet's headline pre-tax profits jumped by more than a third to £610million in the 12 months ending 30 September.
Higher passenger numbers also boosted the group's ancillary sales by 13 per cent to just under £2.5billion, with a further benefit deriving from cabin bags and leisure bundles. As a result, EasyJet's overall revenue expanded by 14 per cent to £9.3billion, while its net cash soared from £41million to £181million.
Having expanded its annual capacity to over 100 million, the company expects to boost this to 103 million in the 2025 financial year, supported by a 6 per cent rise in average journey lengths. It further anticipates shrinking its winter losses, having already cut them by £40million last year through what it called a 'mix of productivity and utilisation benefits'.
