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17th Nov 2020. 1.43pm

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EasyJet (EZJ) – Market Alert

EasyJet post first loss in 25 years

EasyJet’s Final Results, released this morning, saw the budget airline slump to a £1.3bn annual loss, the first in its 25-year history.

Passenger numbers halved to 48.1m in the year to September and revenue fell 52 per cent to just over £3bn.

With only a fifth of its fleet in the air for the remainder of the year, CEO Johan Lundgren agreed an extension to the repayment of a £600m UK government rescue loan to help it manage its finances through the winter season.

Fundamentals

Prior to the pandemic EasyJet had a strong reputation for delivering year-on-year revenue growth.

Its once solid fundamentals have taken a sharp decline this year with the balance sheet moving from a net cash position in 2018 to a projected net debt of £467m.

Whilst the group have access to over £3bn in liquidity, much will ride on the effective global rollout of the vaccines and the ability for travel restrictions to lift in 2021.

Technicals

After collapsing more than 70% from their January highs, EasyJet’s share price appears to have hammered out a bottom…

The shares have bounced seven times from the 480p-350p support zone and the most recent rally has significant momentum.

A retest of the June spike highs at 955p looks the most logical technical scenario.

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EZJ Daily Candle Chart

EZJ Daily Candle Chart

Disclaimer:

This research is prepared for general information only and should not be construed as any form of investment advice.