easyJet: Oddo BHF still says 'reduce' but raises target
(CercleFinance.com) - On Wednesday an analyst at Oddo BHF confirmed his "reduce" rating on the easyJet share, for which he is more confident in terms of revenues, although laments little progress in terms of costs.
Although the broker is more confident in pricing trends over the winter season, which stems from resilient demand in the UK, less aggressiveness from Lufthansa/Eurowings in Germany, and an improved trend in capacity intra-Europe, it remains more cautious regarding the summer months, parrticularly regarding capacity, with the expected return of the 737Max in March/April, in addition to fears on demand (macroeconomic uncertainties) in Germany and Brexit), it said.
Oddo BHF has therefore raised its target price for the share to 1,120 pence (17% downside potential), on the basis of a DCF and a normative valuation (the reference year becomes FY2020 and market assumptions have been updated). The broker believes that easyJet remains more sensitive to demand shocks because of a less flexible cost structure than Ryanair.
The easyJet share is staying afloat this morning, up 0.15% shartly after 11.30 am.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Although the broker is more confident in pricing trends over the winter season, which stems from resilient demand in the UK, less aggressiveness from Lufthansa/Eurowings in Germany, and an improved trend in capacity intra-Europe, it remains more cautious regarding the summer months, parrticularly regarding capacity, with the expected return of the 737Max in March/April, in addition to fears on demand (macroeconomic uncertainties) in Germany and Brexit), it said.
Oddo BHF has therefore raised its target price for the share to 1,120 pence (17% downside potential), on the basis of a DCF and a normative valuation (the reference year becomes FY2020 and market assumptions have been updated). The broker believes that easyJet remains more sensitive to demand shocks because of a less flexible cost structure than Ryanair.
The easyJet share is staying afloat this morning, up 0.15% shartly after 11.30 am.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.