easyJet share price soars as Morgan Stanley flags benefits from industry turbulence

Analysts turn bullish on low-cost carrier

easyJet share price soars as Morgan Stanley flags benefits from industry turbulence

Shares in easyJet (LON:EZJ) have taken off as Morgan Stanley turned bullish on the London-listed carrier. The analysts argue that the company stands to benefit from a consolidation of the short-haul flight industry and currency tailwinds, Proactive Investors reports.

As of 14:34 GMT, easyJet’s share price had added 4.63 percent to 1,583.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.36 percent higher at 7,728.81 points. The group’s shares have added more than 51 percent to their value over the past year, as compared with an over seven-percent rise in the Footsie.

Morgan Stanley bullish on easyJet

Morgan Stanley lifted its stance on easyJet from ‘equal weight’ to ‘overweight’ today, hiking its price target on the shares from 1,490p to 1,725p and noting that the FTSE 100 carrier had joined rival Ryanair as one of the bank’s preferred stocks for the current year.

“As the best hedged name in the sector for 2018, combined with leverage benefits from the Air Berlin slots in Germany, we believe pricing momentum can gradually improve and hence move from ‘equal-weight’ to ‘overweight’,” Morgan Stanley said of easyJet, as quoted by Proactive Investors, adding that its price target was moved up due to expectations of “strong outturn in FY18-19 revenue per seat,” as well as “currency tailwinds in the US dollar offsetting the upward move in the oil price curve”.

The analysts further reckon that following last year’s collapse of Air Berlin and Monarch Airlines, capacity growth in short-haul operations will taper, reducing competition for the industry and supporting stronger pricing.

Other analysts on budget carrier

Barclays meanwhile reiterated its ‘equal weight’ stance on easyJet this week, without specifying a price target on the shares. According to MarketBeat, the low-cost airline currently has a consensus ‘hold’ rating and an average price target of 1,394.17p.

As of 15:05 GMT, Friday, 19 January, easyJet plc share price is 1,581.00p.

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