- easyJet
- 25 January 2024 10:44:37
Source: Sharecast
The bank upped its EBITDAR estimates by around 9% in the next two financial years and by 6% in 2025/26E. It also lifted its 2023/24 pre-tax profit forecast by £87m to £602m, which is ahead of consensus of £558m.
By 2025/26, RBC forecasts pre-tax profit of £722m, which is modestly ahead of Eikon consensus of £709m, although below easyJet's medium-term ambition for pre-tax profit of more than £1bn.
"These upgrades are supported by lower fuel costs and FX," it said, adding that easyJet looks well positioned to deliver a strong result this summer, but that it sees greater upside elsewhere in the sector.
RBC, which rates the shares at ‘sector perform’, said it sees a more favourable outlook for European airlines than relatively undemanding valuations suggest, and the fare outlook as favourable for low-cost carriers, supported by constrained short-haul capacity.
"However, we see more attractive risk-reward prospects in Ryanair and Wizz Air shares. Among our sector perform rated coverage, we also note easyJet also trades on a premium to IAG on EV/EBIT and PE, but generates lower margins.”
