Liberum has reaffirmed easyJet (LON:EZJ) as a ‘hold,’ arguing that while the rising cost of fuel is a problem for the airline industry, the low-cost carrier will be one of the winners in the long term, Citywire reports. The news follows the airline’s latest update at the end of last month when the company signalled that it expects its annual profit to come in at the upper end of its guidance range, having benefitted from industry turbulence and cancellations at low-cost rival Ryanair.
easyJet’s share price rose in the previous session, gaining 0.37 percent to close at 1,213.00p, outperforming the broader UK market, with the benchmark FTSE 100 index giving up 85.21 points to close 1.16 percent lower at 7,233.33, amid a drop in oil prices and higher bond yields. The airline’s shares have lost just under four percent of their value over the past year, largely in line with the Footsie.
Liberum sees easyJet as ‘hold’
Liberum reaffirmed easyJet as a ‘hold’ yesterday, while trimming its price target on the shares from 1,800p to 1,250p.
“Rising fuel prices are a significant headwind for the airline industry,” Liberum’s analyst Gerald Khoo pointed out, as quoted by the newswire, adding that the broker expects easyJet “to be one of the long-term winners, as it has proved to be in previous challenging periods”.
“However, industry capacity growth plans have yet to be moderated, leading to a tough short-term outlook for unit revenues,” Khoo noted.
Other analysts on budget carrier
Citigroup, which sees easyJet as a ‘buy,’ set a price target of 1,600p on the shares yesterday. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 1,664.54p.