Among the major UK stocks, EasyJet PLC (GB:EZJ) has garnered bullish sentiment from analysts ahead of its upcoming first-half trading update next week. Analysts from UBS and J.P. Morgan confirmed their Buy ratings on the stock in April. UBS maintains an optimistic outlook, driven by the company’s effective cost management, price hikes, and reduced geopolitical impact. Meanwhile, J.P. Morgan is bullish on favourable pricing trends in the industry.
EZJ stock has been steadily recovering from the pandemic’s impact. In 2023, EasyJet shares demonstrated resilience by surging by over 35%. Year-to-date, the stock has gained 8% in trading.
easyJet is a leading European airline known for its budget-friendly services, operating across 34 countries.
UBS’ Bullish View on EasyJet
Last week, UBS analyst Jarrod Castle confirmed his Buy rating on EasyJet stock. He also raised his price target from 820p to 850p, now predicting a huge upside of 55.3%. Castle is bullish on the company’s first-half numbers and forecasts a 10% increase in revenue per seat, surpassing the mid-single-digit guidance. Additionally, first-half losses are estimated at £379 million compared to the consensus forecast of minus £399 million.
He further added that EasyJet has already hedged 55% of its fuel requirement for the second half and may have further increased that to 70-80%. This provides a safe cushion during a period of rising oil prices.
Castle is also optimistic about summer travel demand, as reflected in the already secured summer bookings of 60%. He feels the value of EasyJet Holidays is not adequately reflected in the current share price. The company expects EasyJet Holidays to achieve more than 35% of customer growth year-over-year in FY24.
What are Other Analysts Saying?
Harry Gowers from J.P. Morgan predicts a 28% growth in the share price and keeps a Buy rating. He anticipates a strong summer season for EasyJet, well supported by fare hikes. According to J.P. Morgan’s data, EasyJet fares increased by 18% in February 2024.
Furthermore, analyst Andrew Lobbenberg from Barclays believes that EasyJet is “well-placed” amid the capacity shortage and lower aircraft production issues prevailing in the industry. He emphasized that EasyJet boasts the second-largest order book and possesses a fleet that seems “relatively unaffected” by these issues.
Is EasyJet a Good Stock to Buy Now?
As per the consensus among analysts on TipRanks, EZJ stock has been assigned a Moderate Buy rating. The company’s ratings consist of six Buy and three Hold recommendations. The EasyJet share price target is 667.04p, which implies an upside of 22% from the current share price.
