easyJet share price: Credit Suisse sees group as ‘outperform’

Credit Suisse continues to see easyJet (LON:EZJ) as an ‘outperform,’ arguing that the budget airline is successfully navigating a difficult market, Sharecast has reported. The comments come as the low-cost carrier prepares to issue a pre-closing trading statement on October 8, following its Q3 update in July.

easyJet’s share price, however, has slipped into the red this Wednesday, having given up 0.39 percent to 1,026.50p as of 13:53 BST. The stock is underperforming the FTSE 250 which has climbed into positive territory and currently stands 0.13 percent higher at 20,065.95 points. The group’s shares have added have given up more than 27 percent of their value over the past year, as compared with about a two-percent fall in the mid-cap index.

Credit Suisse upbeat on easyJet

Credit Suisse reaffirmed easyJet as an ‘outperform’ today, with a price target of 1,206p. Sharecast quoted the broker as commenting that the airline’s winter capacity plans suggested that it was “churning underperforming routes which should be positive for margins over time”. The analysts pointed to moves by the budget carrier to address its German assets.

“We highlight that easyJet’s biggest capacity shifts in winter 2019/20 are focused on optimising the Berlin schedule and moving capacity from Lufthansa hubs to areas of easyJet strength,” Credit Suisse pointed out. The broker further reckons that the fact that easyJet “is trading significantly below fleet value illustrates the market is pricing in considerable value destruction, despite positions at primary airports [and] a network attractive enough to be tempting partners from Europe, the Middle East and APAC to connect to it”.

Other analysts on budget airline              

Sanford C. Bernstein, which is ‘neutral’ on the budget airline, set a target of 1,000p on the easyJet share price this week. According to MarketBeat, the FTSE 100 company currently has a consensus ‘hold’ rating and an average valuation of 1,174.86p.