RBC sees upside risk to consensus forecasts at easyJet
RBC Capital Markets has upped its target price for on the back of the budget airline's positive outlook statement in this week's annual results, saying the company is positioned for profit growth in the coming year.
Results for the year ended 30 September were in line with estimates but RBC is now estimating a 14% increase in pre-tax profit in the current financial year to £696m, well ahead of the current consensus forecast of £684m.
Pre-tax profit for the year to September 2026 is also tipped to rise to £767m, above the market forecast of £753m, helped by falling fuel unit costs, though the broker highlighted that its outer-year estimates still sit below consensus.
RBC raised its target price from 550p to 570p, but kept a 'sector perform' rating on the stock, saying it sees greater upside elsewhere in the sector.
The broker said it sees "attractions in the easyJet investment case" - such as strong expected growth in the holidays division - but also reasons for "remaining on the sidelines".
"We think the potential expansion of Gatwick airport could be a risk for easyJet since the company has highlighted the superior results delivered at capacity/slot-constrained airports. We see attractions in some peers trading at more attractive valuations (on EV/EBIT and PE multiples) and/ or generating higher margins/ returns."
The stock was up 3.2% at 555.32p by 1424 GMT, having now risen around 8% since the start of the week.
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