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(Sharecast News) - JPMorgan upgraded easyJet on Friday to 'neutral' from 'underweight' as it hiked the priced target to 715p from 360p to bring it in line with the agreed takeover price by Apollo.
JPM said the bid structure will see existing shareholders have the ability to roll shares - which has been committed to by founder Stelios Haji-Ioannou - with Apollo owning a maximum of 49.9% in order to comply with EU Ownership & Control rules.
"Apollo has stated that it regards easyJet as having a differentiated franchise with a strong network and market positions, whereby the next level of growth is better served as a private company," JPM said. "It has also largely backed the existing easyJet strategy (rather than any type of break-up of the business), which in our view means minimal change for the industry and its structure, at least near-term if the transaction completes."
The bank said the risk longer-term for peers is that Apollo transforms easyJet into a more competitive airline in terms of product, cost base and in particular segments like corporate traffic or package holidays.
JPM said there are no anti-trust risks from the transaction given it is not a strategic buyer.
US investment firm Castlelake announced on Thursday that it was abandoning its pursuit of easyJet, clearing the path for a 5.7bn takeover by Apollo.
Elsewhere, Deutsche Bank lifted its price target on Next to 16,000p from 14,000p after the retailer upped its profit guidance again earlier in the week.
Analysts Adam Cochrane said: "The Next machine continues to deliver stronger sales growth than expected which flows down to robust earnings growth.
"In our view, its valuation premium to the rest of the UK retail sector is warranted. 1H full-price sales growth was 7.7%, with an acceleration in 2Q to 9.2%. The beat compared to the guidance has largely become an expectation but this should not distract from the strength of the absolute number compared to peers."
Cochrane said the Next business model continues to evolve, with the upgrade largely coming from the international business and better profit expectations from the equity investments.
"Both of these offer increased diversification away from the more-mature UK business and support the premium P/E multiple," said Cochrane, who maintained his 'hold' rating.
RBC Capital Markets initiated coverage of mid-tier gold producer Pan African Resources with an 'outperform' rating and 155p price target.
"Pan African has been transformed from a conventional South African gold miner into a mid-cap gold producer with a clear path to 350kozpa Au," it said.
The bank said it was "the new kid on the block" on the FTSE 250. It pointed to best-in-class volume growth, EBITDA lifting to $1.2bn by FY29 and positive free cash flow generation, and said the company is on track to return around $0.8bn in ordinary dividends over FY26-30e, with scope for supplementary returns taking the dividend yield ahead of peers.
RBC noted the shares have underperformed the GDX - an exchange-traded fund tracking gold miners - by 11% year-to-date and are trading at 0.70x P/NAV and 3.2x 2026-27e EV/EBITDA. The current share price implies exposure to a solid South African gold business with a free option on Australia growth, it said.