Canaccord raises target price for EasyJet substantially, but stays at 'hold'
Analysts at Canaccord Genuity revised their target price for easyJet substantially higher to reflect the company's modest fleet expansion in the coming years and, at least in the near-term, heightened industry-wide discipline when it comes to adding capacity.
easyJet
538.20p
16:40 26/04/24
Travel & Leisure
7,572.38
16:59 26/04/24
Regarding the latter, analyst Gert Zonneveld, pointed out the limited growth in European short-haul capacity over the coming winter and told clients that he was anticipating further capacity discipline over the following summer.
In a research note sent to clients, Zonneveld also highlighted the potential contribution to the company's bottom line over the medium-term from the upcoming launch of the its new easyJet Holidays product.
His expectation was that easyJet holidays would at least break even during the current financial year.
The analyst also took note of the firm's shift, starting from 19 November, to make all its flights carbon neutral - despite the resulting additional cost of £25.0m per year.
Zonneveld raised his target for the shares from 1,080.0p to 1,036.0p and kept his recommendation for the shares at 'hold'.
"We believe that the improved medium-term outlook improvement justifies a 20% premium to the historical average prospective earnings multiple, which had been under pressure from sluggish economic growth, poor consumer confidence and Brexit concerns," he added.
"Given the strong share price performance over the past couple of months, however, we retain our Hold."