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

Alexander Bueso WebFG News | 12 Oct, 2017 15:38 | | |

ep flota deasyjet
Flota d'easyJetEASYJET

EasyJet

1,417.00

17:20 15/12/17
-0.63%
-9.00
  • 7,490.57
  • 0.57%42.45
  • Max: 7,490.57
  • Min: 7,433.78
  • Volume: 0
  • MM 200 : n/a
17:25 15/12/17
  • 9,870.58
  • 0.52%50.62
  • Max: 9,870.58
  • Min: 9,808.78
  • Volume: 0
  • MM 200 : n/a
17:25 15/12/17
  • 4,162.18
  • 0.51%21.06
  • Max: 4,162.18
  • Min: 4,133.41
  • Volume: 0
  • MM 200 : n/a
17:25 15/12/17
  • 4,108.96
  • 0.50%20.38
  • Max: 4,108.96
  • Min: 4,081.00
  • Volume: 0
  • MM 200 : n/a
17:25 15/12/17

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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