Deutsche Bank and JPMorgan have both lifted their respective valuations on easyJet (LON:EZJ), after the low-cost carrier updated investors on its first-quarter performance yesterday. Deutsche Bank expects earnings growth from the budget airline which has benefitted from industry turbulence which has already claimed rivals Monarch, Air Berlin and Alitalia.
easyJet’s share price has extended the previous session’s gains today, having added 2.16 percent to 1,679.00p as of 13:24 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into the red and currently standing 0.52 percent lower at 7,691.35 points.
Deutsche Bank sees earnings growth
Deutsche Bank, which has a ‘hold’ rating on easyJet, lifted its price target on the stock today from 1,460p to 1,530p, and hiked its profit before tax estimate for 2018 by nine percent to £498 million.
“The major change to our model is an increase in FY18 constant currency revenue per seat from +1.5 percent to +2.5 percent, reflecting the 1Q18 outlook that first half competitor capacity is diminished and will only partially come back in the second half as slots are taken over by new owners,” the analysts explained, as quoted by Proactive Investors, adding that easyJet was also “solidly underplaying the likely performance” of its deal to acquire parts of insolvent Air Berlin’s operations.
JPMorgan also upbeat on carrier
JPMorgan, which is bullish on easyJet with an ‘overweight’ rating, also lifted its price target on the shares today, from 1,550p to 1,560p.
“Net of updated fuel and foreign exchange guidance, where easyJet is advantaged relative to peers, full year pre-tax profit guidance is raised by six percent or about £30 million to £535 million from £505 million, excluding Air Berlin costs,” Proactive Investors quoted the analysts as pointing out.