Numis expects "reassuring" Q3 update from easyJet next week

16th Jul 2014 10:33

Numis Securities has maintained a positive stance on the shares of budget airline easyJet, saying that next week's third-quarter update from the firm should reassure investors."The stock has been under considerable pressure of late (down 28% over three months) with the market concerned about a number of issues [...]," the broker said."There is quite a long list of worries, but we believe that the share price reaction has been overdone and expect a relatively reassuring Q3 update." The statement is due on July 24th.Numis explained that increased capacity in European short-haul and recent profit warnings from global peers have worried investors as of late. Meanwhile, the broker reckons the market they is also likely concerned about other issues including the court ruling against Jet 2 about delayed flight compensation, the recent oil price spike, and Etihad's proposed acquisition of a stake in Alitalia.However, easyJet's traffic statistics for June were strong - passenger numbers up 9.4% and load factor increased by over 200 basis points - and there was no change to guidance from management, Numis highlighted.The broker predicts that easyJet could return at least £500m of cash to shareholders through a special dividend of 130p per share over the next three years.It kept a 2,100p target price for the stock, which was trading 4% higher at 1,328p by 10:58.BC