AUS
NZ
UK
CA
USA
IND
Highlights:
- EasyJet (LON:EZJ) shares rose after JPMorgan Cazenove labeled the airline as a high-conviction "overweight" in the low-cost sector.
- The airline's pricing and earnings resilience compared to peers positions it well for potential growth by September 2025.
- JPMorgan also double-upgraded Air France-KLM, highlighting favorable risk-reward dynamics in the European airline sector heading into winter.
Shares of EasyJet (LON:EZJ) saw an uptick on Wednesday following a positive endorsement from JPMorgan Cazenove, which labeled the airline as a high-conviction "overweight" within the low-cost carrier segment. Despite maintaining a flat performance this year, EasyJet has shown more resilient pricing and earnings compared to its industry peers, prompting JPMorgan to highlight the stock as an attractive option.
The investment bank indicated that there is a clearer path to substantial earnings growth for EasyJet by September 2025. This optimism comes amid a broader analysis of the European airline sector, where JPMorgan perceives a buying opportunity as the market transitions into winter. The bank noted a recent upward trend in the sector over the past month, despite it underperforming the overall market this year, largely due to concerns regarding softer passenger demand and normalizing prices post-pandemic.
JPMorgan also pointed out that the current risk-reward balance within the sector appears favorable, suggesting the potential for continued seasonal outperformance in the upcoming fourth quarter. Factors contributing to this positive outlook include declining fuel costs and stabilizing prices, which are not expected to plummet but rather normalize. This situation raises the likelihood of margin expansion for airlines heading into the next fiscal year, especially in contrast to historically high multiples seen during peak travel cycles.
In addition to its analysis of EasyJet, JPMorgan double-upgraded Air France-KLM from "underweight" to "overweight." The bank anticipates an inflection point in earnings momentum for Air France-KLM as it moves toward 2025, coinciding with what is described as a historically low share price for the airline. Furthermore, JPMorgan expressed neutrality regarding the choice between network airlines and low-cost carriers, indicating a balanced approach in their evaluations across the sector.
As of 11:30 BST, EasyJet shares rose by one percent to 515.30p, reflecting the positive sentiment from analysts and the airline's potential as a strong player in the evolving market landscape.
