Liberum remains bearish on easyJet (LON:EZJ), arguing that any positive earnings momentum the airline will benefit from this year has already been priced into the shares, Citywire reports. The comments follow the airline’s interims yesterday when the budget carrier revealed that its half-year losses had narrowed.
easyJet’s share price surged on the update, adding 3.32 percent to close at 1,741.00p. The shares outperformed the broader UK market, with the benchmark FTSE 100 index adding 12 points to end the session 0.16 percent higher.
Liberum reaffirms easyJet as ‘sell’
Liberum reiterated its ‘sell’ stance on easyJet yesterday, with a price target of 1,250p on the shares. The move came after the low-cost carrier reported a small half-year loss, noting that it had benefitted from positive trading environment, the timing of Easter, as well capacity reductions by other airlines in its markets.
“Competitor airline failures helped the pricing environment over the winter, more than offsetting a disappointing cost performance on severe winter weather disruption,” the broker’s analyst Gerald Khoo pointed out, as quoted by Citywire, adding that the airline’s full-year profit before tax outlook implied an about 10-percent uplift to consensus at the mid-point. easyJet expects to deliver headline profit before tax for the financial year to September 30 of between £530 million and £580 million.
“The supportive capacity environment seems set to continue, although the cost outlook remains disappointing,” Khoo continued, adding that the broker saw “the positive earnings momentum as at least partially priced in already”.
Other analysts on low-cost airline
Canaccord Genuity reiterated its ‘buy’ rating on easyJet yesterday, valuing the shares at 1,640p, while Numis continues to see the airline as a ‘hold,’ with a price target of 1,508p on the shares. According to MarketBeat, the low-cost carrier currently has a consensus ‘hold’ rating and an average price target of 1,652.71p.