Easyjet is on course to dive out of the FTSE 100 this week, as part of the index’s quarterly reshuffle.
The airline has seen its value decline by 40 per cent over one year and issued a profit warning last month, sending its shares down nine per cent on the day. The firm blamed a larger than expected impact from sterling weakness for an anticipated £105m hit on earnings.
City stockbroker Panmure Gordon said in a note:
Easyjet is maintaining its aggressive capacity plans with little scope for cost efficiencies while operational issues are addressed and fuel ticks up. Adverse foreign exchange is likely to keep consensus under pressure
The Share Centre, a stockbroker, highlighted the likely relegation of fellow FTSE 100 constituent and outsourcing company, Capita, as another firm on its way out of the index.
Investment research analyst, Helal Miah, at The Share Centre said: “The group has seen its share price remain under pressure since the Brexit vote, as the market highlighted concerns over future contracts and their length, which has dropped from an average of eight years to seven.”
Other companies that could be in the mix for relegation are Intu Properties and Dixons Carphone.
Those tipped to enter the top 100 are Investec, Rentokil Initial and Scottish Mortgage Investment Trust.