Cannacord Genuity lifts easyJet to a 'hold' after management raises guidance

Alexander Bueso Sharecast | 12 Oct, 2017 15:38 | | |

ep flota deasyjet
Flota d'easyJetEASYJET

EasyJet

1,313.00

17:17 20/10/17
1.39%
18.00
  • 7,523.23
  • 0.00%0.19
  • Max: 7,560.04
  • Min: 7,517.07
  • Volume: 0
  • MM 200 : n/a
17:18 20/10/17
  • 9,654.45
  • -0.26%-25.19
  • Max: 9,715.20
  • Min: 9,650.29
  • Volume: 0
  • MM 200 : n/a
17:18 20/10/17
  • 4,180.73
  • 0.02%0.63
  • Max: 4,198.47
  • Min: 4,177.51
  • Volume: 0
  • MM 200 : n/a
17:18 20/10/17
  • 4,127.92
  • 0.02%0.71
  • Max: 4,144.79
  • Min: 4,124.99
  • Volume: 0
  • MM 200 : n/a
17:20 20/10/17

Analysts at Cannacord Genuity raised their recommendation on shares of easyJet from 'sell' to 'hold', arguing that better-than-expected Summer 2017 trading would provide greater-than-expected lift for the shares.

The budget carrier's revenues per share fell by 1.4% over the summer, but that was better than the 2% drag they had penciled in, which meant profits before tax were now likely to come in towards £405m to $410m, as per management's revised guidance, versus a previous view for between £380m to £420m.

Greater competition was still expected to prove a headwind for the firm's profit recovery versus the lofty levels reached a couple of years ago, although easyJet's own capacity growth deceleration in 2017/18 would act as a partial offset, they said.

All told, Cannacord raised its target price for the stock from 1,150p to 1,200p, yet with less than 10% downside potential remaining it upgraded its view on the shares.

The Canadian broker also upped its forecasts for earnings per share for 2016/17 by 6.2% to 84.0p, on the back of which it also nudged up its estimate for the company's dividend per share from 36.7p to 38.9p.

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