Low-cost airline easyJet is set to soar back into the UK’s blue chip stocks index after a recent shares recovery following a turbulent year.
The latest FTSE reshuffle due to be announced on December 4 could see the no-frills carrier’s promotion after just a brief spell in the FTSE 250, having been booted out of the top tier just six months ago.
Its shares have seen a bumpy ride in 2019, but the stock has bounced back since September, thanks in part to the demise of tour operator Thomas Cook that month.
Rival airlines and holiday firms have all benefited as Thomas Cook’s collapse saw them pick up customers and market share.
EasyJet’s shares have surged by 43% over the past three months, with the firm confirming in full-year results earlier this month that it is relaunching its package holiday to take advantage of the gap left in the market.
It posted a 26% drop in pre-tax profits to £427 million for the 12 months to September 30.
But revenues jumped by 8.3% to £6.4 billion on the back of increased capacity.
It marks an improvement since the start of the year, when it had swung to a pre-tax loss of £275 million for the six months to March 31 amid rising costs and greater uncertainty due to Brexit.
This led to a shares plunge and its relegation from the FTSE 100, ending a more than six-year tenure in the premier shares league.
But insurer Hiscox is suffering reverse fortunes and is seen as a dead cert to tumble out of the top flight in the reshuffle, which will be based on Tuesday’s closing prices and announced after close on Wednesday, to take effect later in the month.
Hiscox has suffered from higher payouts in the US and a surge in claims from natural disasters, such as the Japanese typhoon, which have dented its bottom line.
Its shares have fallen by 18% over the past three months.
AJ Bell investment director Russ Mould said: “The specialist underwriter of catastrophe, property and marine insurance only joined the UK’s elite equity benchmark a year ago, but its £3.7 billion market capitalisation means it looks set for an automatic exit, to be replaced by easyJet, which is set to return to the FTSE 100 after an absence of just six months.”
He said Just Eat could also make a potential return to the FTSE 100 in the reshuffle, although it would likely be only a brief stint as suitors Takeaway.com and Prosus fight it out in a takeover tussle for the group.
Gambling giant GVC is another possibly in line for promotion to the blue chip index, while experts said B&Q owner Kingfisher is potentially in the line of fire to be kicked into the FTSE 250 after a torrid time for its shares.
And Magners maker C&C is among those waiting in the wings to make it into the FTSE 250, at the possible expense of retailer Card Factory.