easyJet is expected to report a "relatively reassuring" third quarter update on Thursday despite a recent drop in the share price amid a number of market concerns, according to Numis.
The budget carrier's stock has fallen 28% in the past three months on worries including increased capacity in European short-haul flights, a profit warning from Dart and cautious comments from Monarch, Lufthansa and Air France.
The recent oil price
spike and the announcement in late June that Etihad had agreed to acquire a 49% stake in ailing Alitalia also weighed on shares.
"There is quite a long list of worries, but we believe that the share price reaction has been overdone and expect a relatively reassuring third quarter update," Numis said.
"June traffic stats were strong (load factor up 210 basis points) and, crucially there was no change to guidance: we believe that management would have taken the opportunity to change guidance if it felt it necessary."
In May the European airline said it predicted an increase in second half revenue per seat of "low single digits" which Numis believes will be the main focus for investors on Thursday.
The broker added: "In our opinion, easyJet has the opportunity to benefit further from structural change in short-haul aviation in Europe, including: i) the broadening of the EU Common Aviation Area ; and, ii) further market share gains from legacy carriers.
"We believe that easyJet could return at least £500m of cash to shareholders (130p per share) by means of special dividend over the next three years."
easyJet will be among a long list of companies with interims out Thursday including Kingfisher, Hammerson, Tate & Lyle, AG Barr and Britvic.
Thursday July 24th
CSR, Hammerson, Howden Joinery Group, Lancashire Holdings Limited, Nichols, Rathbone Brothers, Reed Elsevier, Sagentia Group, Unilever
INTERIM DIVIDEND PAYMENT DATE
Octopus Titan VCT 1, Octopus Titan VCT 2, Octopus Titan VCT 3, Octopus Titan VCT 4
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
New Homes Sales (US) (15:00)
CSR, Lancashire Holdings Limited, Unilever
Britvic, easyJet, Electrocomponents, Halma, Marston's, Reed Elsevier, Tate & Lyle
Amedeo Resources, Astar Minerals, Camper & Nicholsons Marina Investments Ltd., Capital Management & Investment, Cyprotex, De La Rue, Dee Valley Group, Dee Valley Group (Non-Voting), Electrocomponents, Energy Technique, F&C Global Smaller Companies, Fuller Smith & Turner, Halma, NB Distressed Debt Investment Fund Ltd., Personal Assets Trust, Phorm Corporation Ltd (DI), Record, Royal Mail, SABMiller, Securities Trust of Scotland, Tate & Lyle, Tau Capital, TP10 VCT , TP5 VCT, Triple Point Income VCT, Triple Point Income VCT, Triple Point Income VCT C, Triple Point VCT 2011, Vertu Motors
Close Brothers Group, Kingfisher, SABMiller
UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Big Yellow Group, DCC, Investec Structured Products Calculus VCT, Investec Structured Products Calculus VCT 'C' Shares, Octopus AIM VCT, PayPoint