DAVY VIEW

easyJet has reported a Q3 headline PBT of £85m, down from £286m in the prior year. The Q3 result was impacted by the Middle East conflict, with a later booking profile and increased fuel costs leading to margin pressure on the airline side. RASK was down 3%, while fuel CASK was up 13%. Ex-fuel CASK was up 3%, in line with guidance. easyJet holidays showed resilience in the operating model, delivering PBT of £84m. Booked Q4 ticket yield is currently flat and load factor is 2ppts behind (improvement from 3ppts in May). The company has highlighted that there is a strong late booking environment, with bookings beyond the month of departure also beginning to improve, albeit still needing some price stimulation. For FY26, we forecast PBT of £114.3m (Visible Alpha (VA): £118m). We continue to be of the view that a takeover bid will succeed.