EasyJet share price sits and waits for October 12

The easyJet (LON: EZJ) share price has been in a consolidation phase in the past few weeks as traders wait for the upcoming earnings. The stock was trading at 418p on Monday, down by more than 21% from the highest point this year.

EasyJet, one of the biggest regional airlines in Europe, will be the key FTSE 250 stock to watch this week as the company is set to publish its financial results. 

These results will provide more colour about the company’s performance in its financial year. Analysts believe the firm continued thriving as demand for tourism in Europe continued.

However, a key risk for EasyJet and other airlines is the rising price of jet fuel. Data by IATa shows that the average jet fuel price has risen to $ 1,034.60 per ton. In Europe, where EasyJet operates, the average price stands at $1,032.

Jet fuel is an important part of the airline industry since it is the biggest cost. This explains why American Airlines recently slashed its forward guidance. 

The most recent results revealed that the company’s revenue and capacity soared in its Q3. Precisely, the company’s passenger growth rose by 7% YoY while the load factor rose by 2% to 90%.

EasyJet’s revenue jumped to £2.36 billion as the passenger and ancillary and holiday revenue soared to £1.5 billion, £622 million, and £237 million. Its EBITDAR rose to over £372 million while profit before tax was £203 million. It also reduced its debt substantially.

EasyJet has benefited from both volume and pricing power. For one, the average airline revenue per customer rose to £57.33 million from £46.20 while the ancillary revenue rose to £23.75.

In addition to the rising jet fuel prices, EasyJet is facing geopolitical risks as the war in Israel continues.

The daily chart shows that the EZJ stock price has been under pressure in the past few months. It has moved into a correction as it dropped by more than 11% from the highest point this year. The shares have retreated below the 50-day and 25-day moving averages.

They have also flipped below the important resistance point at 466p, the lowest point in May and June. It has also moved below the 38.2% Fibonacci Retracement level. Therefore, the shares will likely continue falling as sellers target the key psychological level at 400p.

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