Source: Sharecast
Canaccord Genuity held its FY25 pre-tax profits estimate at £563m, 3% below consensus, and said it still sees a lower pre-tax profit margin year-on-year.
The Canadian bank sees downside risk to consensus FY26 pre-tax profits, noting that any reactionary share price weakness would be a buying opportunity to increase a position in Jet2 shares, which continue to trade on a price-to-earnings ratio of more than 30% below pre-Covid levels.
Canaccord noted that FY26 will see start-up costs at Luton and Bournemouth, £45.0m of external-driven labour-related and SAF cost increases, and 3% year-on-year wage increases, offset by fuel hedging and a more efficient fleet.
"We see PBT outlook almost unchanged - with PBT margin lower YoY but profits still up (2% YoY). To us, PBT growth potential despite external pressures continues to demonstrate Jet2's strengths, stemming from the value of holidays - which are >80% of Jet2's revenues – backed up by a 'Fortress Balance Sheet'," said Canaccord, which stood by its 2,050.0p target price on the stock.
Reporting by Iain Gilbert at Sharecast.com