From Morningstar: 2025-05-12 05:19:00

Millions of Britons are gearing up for summer holidays abroad, with 86.2 million traveling in 2023. ABTA predicts 68% intend to go overseas in 2025. EasyJet saw 7% passenger growth, while Ryanair carried 55.5 million passengers in Q1 2025, up 10% from last year.

US President Trump’s tariffs could threaten the travel industry’s recent growth. Heathrow Airport faced a £40 million loss due to a power outage. A global recession from US-China trade tensions may further impact the travel sector.

Low-cost airline easyJet and British Airways owner IAG are vulnerable to global tourism shifts. Trump’s tariffs could reduce earnings growth, but financially strong airlines are better positioned to weather the storm.

IAG posted a Q1 profit of EUR 239 million, up from a loss of EUR 87 million last year. Lower oil prices may offset softer demand, with Brent crude at $65 a barrel. IAG ordered 53 new aircraft, showing confidence in long-term travel demand.

British Airways ordered 32 new Boeing planes post US-UK trade deal. IAG stock trades at 312.46p, below Morningstar’s fair value of 410p. EasyJet sources from Airbus, minimizing supply chain risk. EasyJet’s holiday division boosted profits, despite a Q1 loss of £61 million.

Simon Murphy, VT Tyndall Unconstrained UK Income Fund manager, bullish on easyJet due to holiday business expansion. The airline is undervalued, trading lower than during past crises. EasyJet’s focus on longer leisure routes and package holidays may drive future revenue growth. Despite EasyJet’s current share price of 528.2p, below Morningstar’s fair value estimate of 640p, Carnival’s stock is trading well below its fair value estimate, insulated by 80% bookings for 2025. Carnival CEO predicts 30% earnings growth despite geopolitical volatility. Rolls-Royce, straddling travel and defense, enjoys an 82.93% one-year total return and plans to reach profit targets two years early. Tariffs may impact Rolls-Royce’s global supply chain, but the company remains undervalued and well-positioned for growth. 1. The stock market saw a 2% increase today, with the S&P 500 reaching a new record high. Tech stocks led the way, with Apple and Amazon both posting gains of over 3%.

2. In sports news, the NBA playoffs have been filled with upsets, including the top-seeded team being eliminated in the first round. Viewership numbers are up 15% compared to last year.

3. COVID-19 cases continue to rise in several states, with hospitals reporting a shortage of ICU beds. The Delta variant is spreading rapidly, prompting concerns about a potential fourth wave of infections.

4. The housing market remains hot, with home prices up 10% compared to last year. Low mortgage rates are driving demand, but inventory shortages are causing bidding wars and driving prices even higher.



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