EasyJet flies higher on Cantor upgrade to 'buy'

EasyJet flew higher on Tuesday after Cantor Fitzgerald upgraded the stock to ‘buy’ from ‘hold’ and lifted the price target to 1,300p from 1,200p.

The brokerage said EasyJet’s low-cost business model is resilient and has generated strong profits and taken significant market share in previous difficult macroeconomic environments.

It noted the stock is down 40% year-to-date due to concerns about trading, disruption to operations and Brexit.

“But we think that these concerns are overdone and the stock is oversold. We believe that travel spend across Europe will be more resilient than some investors fear.

“Moreover, EasyJet can use its financial strength to discount aggressively and build share. Our conservative forecasts build-in a weaker pricing scenario.”

Cantor added that the stock is trading at a 24% discount to its five-year average price-to-earnings.

At 1200 BST, shares were up 3.2% to 1,072p.