We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Stifel upgrades easyJet to 'hold', says dilution now priced in

Mon 25 October 2021 11:23 | A A A

No recommendation

No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.

(Sharecast News) - Stifel upgraded its stance on easyJet to 'hold' from 'sell' on Monday following the £1.2bn capital increase and recent trading statement, but cut the price target to 600p from 650p.

"Our more constructive view is based on the share price now capturing the anticipated dilution and trading remaining benign for short-leisure (despite higher fuel prices and new Covid-19 variants)," Stifel said.

Stifel said the budget airline's recent trading update confirmed positive booking trends for FY-21.

"Restrictions in the UK have greatly eased and especially for the October half-term there have been strong bookings," it said.

"We believe that confirms the general industry trend of short-haul leisure pent-up demand being released, which we think will continue, despite new Covid-19 variants and higher fuel prices. Given the company's attractive exposure to short-haul leisure (incl. easyJet Holidays), it will be a natural beneficiary."

However, Stifel also said its longer-term strategic/structural concerns remain. "We still expect structural margin pressure and negative free cash flow for years to come due to upside pressure on costs and downside pressure on yields at the same time," it said.

At 1120 BST, the shares were up 1.9% at 608.20p.

    The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.


    More stockbroker tips from ShareCast

    Latest economy and stock market articles