Citi cuts price target for easyJet

Citigroup has slashed its price target for easyJet as it reduced full-year forecasts for the low-cost carrier.

The bank, which has a ‘neutral’ rating on the FTSE 250 airline, has reduced its price target to 550p from 660p.

The move was prompted by changes to the bank’s forecasts, including those for earnings, volumes, pricing, fuel and unit costs. Citi now estimates that the London-listed firm will post a full-year pre-tax loss of £776m in 2020, compared to its previous target of a £561m loss.

For 2021, Citi has pencilled in a pre-tax loss of £159m, widening its earlier estimate for losses of £121m.

Travel stocks have been hit hard in recent days, as lockdown restrictions are tightened once again following a rise in Covid-19 cases. On Monday, easyJet fell sharply, and by 1430 BST on Tuesday, it was down 3% at 479.5p.

Also down was short-haul rival Ryanair, off 5%, and British Airways owner IAG, down 2%.

On Tuesday, prime minister Boris Johnson announced a range of new restrictions to last for six months, including a call for people to work from home where possible and a 10pm curfew on pubs and restaurants.