Business Overview
EasyJet Plc (LON: EZJ) is a low-cost European point-to-point airline company. The company has four geographic segments, which include the United Kingdom, Southern Europe, Northern Europe and Other.

Recent News
On 6^th April 2020, the company announced that it had successful issued £600m of Commercial Paper through the Covid Corporate Financing Facility (CCFF). It had also requested to fully draw down on its $500m Revolving Credit Facility, secured against aircraft assets. As a result of this EasyJet is expected to have access to cash reserves of £2.3bn.

EasyJet had made an agreement for its cabin crew according to which crew would be paid 80 per cent of their pay through the job retention scheme of Government.  This agreement had been effective from 1 April 2020 for a period of two months.

COVOD-19 Update
On 16^th March 2020, the Group announced that there is a significant reduction in the customer demand levels due to the Coronavirus pandemic. The company has taken several measures to counter the impact of COVID-19. The Group had tried to minimise cost related and non-critical expenditure from its business. The company announced that it had £1.6bn cash balance and undrawn $500m Revolving Credit Facility. It also had a large and valuable slot portfolio.

Share Price Performance  

Daily Chart as on 6^thApril 2020, after the market closed (Source: Thomson Reuters)

On April 6, 2020, at the time of writing (after the market close), Easyjet Plc shares were closed at GBX 552.40. Stock’s 52 weeks High and Low are GBX 1,570/GBX 410. 

Valuation Methodology


Key Risks
Environment and sustainability issues such as climate change, etc. could affect the revenue and profitability of the company. Any change in regulations and government policies could affect the overall business of the company. Macroeconomic and geopolitical factors could affect the performance of the company. Failure in cybersecurity and a critical data breach could hamper the operations as well as the reputation of the company.

Conclusion
The company has delivered a decent financial performance during the first quarter of the financial year 2020. The company has launched easyJet holidays successfully, which could benefit the growth of the company. The Group has increased its expectations for H1 revenue per seat at constant currency. The company expected full-year foreign exchange movements to have a GBP 70 million positive impact on headline profit before tax. The company is facing emerging headwinds and cost pressures. RecentCoronavirus outbreak had impacted the growth of the company and further pressure on its revenue and profitability could be seen in the near term.
Based on the above rationale and risks associated, we recommend investors to keep a “Watch” on the stock at the closing price of GBX 552.40 (as on 6th April 2020), with support from few catalysts needs to be evaluated at a later stage.

*All forecasted figures and peer information have been taken from Thomson Reuters.

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