easyJet’s (LON:EZJ) share price has fallen into negative territory as Kepler Cheuvreux trimmed its rating on the low-cost carrier. Sharecast quoted the broker as commenting that the budget airline could become a takeover target following Brexit.
As of 14:44 BST, easyJet’s share price had given up 1.70 percent to 938.40p, underperforming the FTSE 250 index which currently stands 0.36 percent lower at 19,412.34 points. The group’s shares have given up more than 38 percent of their value over the past year, as compared with about a 7.8-percent fall in the mid-cap index.
Kepler Cheuvreux trims stance
Kepler Cheuvreux lowered its rating on easyJet from ‘hold’ to ‘reduce’ today, also trimming its valuation on the shares from 1,200p to 820p. Sharecast quoted the analysts as commenting in a note that while the mid-cap budget carrier could attract buyers once the UK had exited the EU and its contingency plans had been ‘tested,’ until then, the shares would trade on the group’s profitability, which may be impacted by expectations of slower growth in 2020.
They further pointed to decline in capacity growth would make it ‘more difficult’ to achieve an improvement in non-fuel costs in the next year, although they did not factor in any potential impacts from Brexit.
Today’s update comes after easyJet updated the market on its third-quarter performance on July, reporting what it referred to as ‘robust’ performance, and announcing that it had boosted its team with a new chief operating officer.
Other analysts on budget carrier
JPMorgan Chase & Co, which is ‘neutral’ on the budget carrier, set a target of 1,060p on the easyJet share price last week, while Sanford C. Bernstein, which is also ‘neutral’ on the stock, set a valuation of 1,000p. According to MarketBeat, the mid-cap airline currently has a consensus ‘hold’ rating and an average price target of 1,174.86p.