|Bid||902.60 x 28000|
|Ask||902.40 x 306100|
|Day's Range||885.00 - 907.00|
|52 Week Range||840.00 - 1,808.50|
|Beta (3Y Monthly)||0.47|
|PE Ratio (TTM)||18.42|
|Forward Dividend & Yield||0.59 (6.73%)|
|1y Target Est||1,479.74|
Dividend paying stocks like easyJet plc (LON:EZJ) tend to be popular with investors, and for good reason - some...
(Bloomberg Opinion) -- If it’s true that all political lives end in failure, then the same could be said for business. Carsten Spohr became Deutsche Lufthansa AG’s chief executive in 2014, made an impressive start, and had his contract extended to the end of 2023. He may regret signing up for that long.The German airline’s shares tumbled 12 percent on Monday after it issued a second profit warning in as many months. It expects to generate as little as 2 billion euros ($2.2 billion) of operating profit in 2019, up to 25% below what was expected by analysts.The stock is now worth less than four times last year’s earnings, a pretty pitiful multiple, and investors who bought the stock when Spohr took over have lost money. Suddenly, a man feted as one of Germany’s most accomplished corporate leaders looks ordinary.How times have changed. Spohr’s response to a 2015 aircraft crash at the Lufthansa offshoot Germanwings was both sensitive and assured. Later on he faced down industrial action to win concessions from staff on pensions. In 2017, Lufthansa’s profit hit a record high and the stock price soared 150%. Spohr was duly named Manager of the Year by Germany’s influential Manager Magazin.Sustaining all of this was always going to be hard in the notoriously unstable airline business. Fuel costs have risen, rivals have added new capacity and air cargo demand has waned, thanks in part to U.S. President Donald Trump’s trade crusades. (It’s worth reading Bloomberg’s William Wilkes on Lufthansa’s litany of problems.)But Spohr can’t just blame external factors. His company has chased growth to the detriment of profitability and it has spent heavily on new jets and integrating older ones from the insolvent Air Berlin. Gross capital expenditure jumped 8% to 3.8 billion euros ($4.3 billion) last year, leaving precious little spare cash.While Lufthansa is still doing fine on long-haul routes, Spohr’s big idea — a budget subsidiary called Eurowings — has been a disaster. The new unit was meant to challenge Ryanair Holdings Plc and EasyJet Plc in Europe, and to serve long-haul holiday destinations, but it lost more than 230 million euros last year. Instead of breaking even in 2019, as was anticipated, it will now remain in the red.Spohr has hit the brakes on Eurowings’s expansion but the company plans to “vigorously defend” its dominant market position in Germany and Austria. Translated, that sounds worryingly like: “Fare war? Bring it on.”Ryanair is pursuing a similar battle of attrition against weaker rivals such as Norwegian Air Shuttle ASA, with the aim of forcing them out of business. But Ryanair’s costs are much lower than those of Eurowings.Of course, Lufthansa can afford a couple of bleak years. At the end of March it had 12 billion euros of net debt, aircraft lease and pension liabilities — or about 2.4 times Ebitda (a measure of earnings). Norwegian’s leverage is miles higher.But when your corporate strategy is all about acquisition (Thomas Cook Group Plc’s German arm could be next on Spohr’s shopping list) and heavy investment, falling profits are doubly alarming. They suggest cash might be misallocated. “We think the sooner the company focuses on value for shareholders and less chasing or defending market share, the better for the shares. We see no hint of that yet,” RBC’s Damian Brewer complained.At an investor event next week, Spohr has a chance to explain how he plans to fly Lufthansa out of this mess. Once seen as a safe steward of Lufthansa’s capital, he’s starting to look a little reckless.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
European stocks were in recovery mode on Friday after a cautious message from the European Central Bank hit investors' appetite for risk in the previous session, with traders eyeing a U.S. jobs report and U.S. trade tussles with Mexico for fresh direction. Automakers climbed on a report that U.S. President Donald Trump could delay the tariffs he had threatened to put on Mexican goods as soon as this coming Monday, while French drugmaker Sanofi gained on its appointment of a new chief executive. France's CAC 40 outperformed its euro-peers with a 0.9%, helped by French pharma giant Sanofi.
As the pound fell, the FTSE 250 lost 1.4% to hit its lowest point since March 29, when Britain was originally scheduled to exit the European Union. Dublin's main index, often regarded as a barometer of Brexit jitters, was also down nearly 1.4%. The turmoil was compounded when prominent Brexit supporter and Leader of the House of Commons, Andrea Leadsom, resigned from the government.
Global risk appetite was jolted after Reuters reported Alphabet Inc's Google suspended some business with Huawei, while Apple Inc supplier Lumentum Holdings Inc said it had discontinued all shipments to Huawei. "Seeing as the United States has taken a tough stance against Huawei, traders are not hopeful that the U.S.-China trade dispute will be resolved quickly," David Madden, market analyst at CMC Markets UK, wrote in a note. Germany's DAX dropped 1.6%, while French stocks shed 1.5%.
After initially falling 6%, the airline's shares made up some ground after O'Leary, who helped to develop the no-frills airline model in Europe, argued that lower fares and profitability for a couple of years were a price worth paying to boost market share and hasten consolidation. O'Leary said the lower fares and profit were cyclical and that four or five European airlines were likely to emerge as the winners in the sector. "Our strategy would be to keep adding capacity as quickly as we can in all the markets where we can," said O'Leary, who has been in charge of Ryanair since 1994.
With summer vacation around the corner, here's a look at what you need to know before you purchase a ticket on a budget airline.
British budget airline easyJet said it would meet expectations in 2019 despite a worse trading environment than last year as worries over Brexit and economic weakness in Europe hurt consumer demand. EasyJet had already said last month that its outlook for the second half of the year was more cautious because European travellers were holding off booking their summer holidays for fear of how the Brexit process will pan out. EasyJet shares, which had fallen 13% since the April trading update to their lowest in over two years, were up 3.2% by 0844 GMT.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of easyJet Plc and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
Airlines operating in Britain should pay a seat levy to cover the costs of getting passengers home in case a carrier goes bust, a government commissioned review said on Thursday. The recommendations seek to even out anomalies in protection for British travellers, highlighted when Monarch collapsed in 2017, but airlines rejected the review's proposed "airline seat levy" which it said would cost less than 50 pence per passenger. "Although airline insolvencies are relatively rare... they do happen – and at times have required government to step in to repatriate passengers at great cost to the taxpayer," Peter Bucks, who chaired the review, said in a statement.
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Indigo Partners and Lufthansa are among the likely bidders for Thomas Cook's airline business, with a deadline of May 7 set for expressions of interest, sources said. The heavily indebted British travel group put its profitable airline business up for sale in February after profit warnings in 2018 left it needing to raise cash. Thomas Cook's airlines business consists of Germany's Condor, as well as British, Scandinavian and Spanish operations.
Glasgow airport briefly suspended all flights on Tuesday after a report of a security alert on an inbound easyJet flight from London Gatwick. "There were reports of a security alert on an inbound easyJet flight from Gatwick," said a spokesman for Glasgow airport.
The following are the top stories on the business pages of British newspapers. Reuters has not verified these stories and does not vouch for their accuracy. The Times Facebook Inc could pay as much as ...
PARIS (Reuters) - France's main pilot union, the SNPL has warned the government it will call a strike from May 6 to May 11, which could affect all airlines operating in France, if a new law threatens to ...