Shares in easyJet (LON:EZJ) have climbed into positive territory in today’s session, as HSBC lifted its valuation on the group. The analysts have noted that they expect evidence of the airline’s recovery to mount through the summer.
As of 13:03 BST, easyJet’s share price had added 0.30 percent to 1,394.19p, largely in line with gains in the broader London market, with the benchmark FTSE 100 index currently standing 0.28 percent higher at 7,565.16 points. The group’s shares have lost nearly eight percent of their value over the past year, but have gained just under 39 percent in the year-to-date.
HSBC, which is bullish on easyJet with a ‘buy’ rating, lifted its valuation on the shares from 1,450p to 1,550p today. The broker made small upgrades to its profit estimates for the blue-chip carrier after raising the load factor and trimming reported yield reduction estimates, buoyed by increasing evidence that the current quarter will be a strong one.
“Absent the Easter effect we expect more moderate traffic and revenue trends in May and June,” HSBC said, as quoted by Sharecast. “Looking to the peak summer quarter we think easyJet will benefit particularly from its standout weak comps last year.”
The analysts further pointed out that disruption has been moderate so far this year, and forecast that the budget carrier might be ‘a marginal beneficiary’ from the computer system meltdown at IAG’s (LON:IAG) British Airways unit which left more than 75,000 passengers stranded at Heathrow and Gatwick airports over the weekend.
The 23 analysts offering 12-month price targets for easyJet for the Financial Times have a median target of 1,150.00p on the shares, with a high estimate of 1,450.00p and a low estimate of 700.00p. As of May 26, the consensus forecast amongst 27 polled investment analysts covering the blue-chip carrier advises investors to hold their position in the company.