Shares of UK-based EasyJet PLC (GB:EZJ) took off after the airline reported strong earnings growth in FY24, resulting in a dividend hike. EasyJet reported a 34% year-over-year increase in its headline profit before tax to £610 million, driven by record summer profits. Consequently, the airline proposed an ordinary dividend of 12.1p per share, marking a growth over the 4.5p paid in FY23. Following the results, EasyJet shares gained over 2% as of writing.
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EasyJet is among the leading airlines in Europe that operates in 34 countries and is known for its cost-effective services.
EasyJet Outshines with Strong Summer Results
EasyJet’s profits during the peak summer period (second half) increased by 11% to a record £960 million, driven by a rise in passenger numbers and stable airfares. Additionally, the company’s package holiday division had a strong performance, with pre-tax profits rising 56% year-over-year to £190 million.
For the full year, revenues increased 14% year-over-year to £9.3 billion. Meanwhile, its seat capacity grew 8% to 100.4 million seats.
EasyJet Maintains Strong FY25 Outlook
Moving ahead in FY25, EasyJet maintained a strong outlook and expects its seat capacity to increase by 3%. Moreover, the airline aims to increase its customer base by approximately 25% for EasyJet Holidays, building on its current base of 2.6 million customers. EasyJet is targeting growth on popular long-haul leisure routes like North Africa and the Canaries.
On the flip side, EasyJet highlighted challenges from the growing tensions in the Middle East and higher costs. In FY24, group headline costs, excluding fuel, increased 14% to £6.5 billion.
Is EasyJet a Good Share to Buy?
Following the results, Jefferies analyst Jaina Mistry reiterated a Buy rating on EasyJet stock, forecasting 24.34% upside potential. Mistry noted that growth in the holiday business is robust and contributes positively to the overall value of the airline. She expects a short-term boost in the share price.
As per the consensus among analysts on TipRanks, EZJ stock has been assigned a Moderate Buy rating based on five Buy and three Hold recommendations. The easyJet share price target is 635.53p, which implies an upside potential of 15% from the current share price.
