Berenberg upgrades Easyjet to 'buy'

Berenberg said a recent increase in consumer confidence around flying had done little for the group's share price, noting the company had actually performed more in line with its distressed flag carrier peers and that its asset valuation and earnings discounts had hit "extreme" levels.

The German bank stated that booking activity for near-term travel had steadily increased in July, with fare-scrape data suggesting that Easyjet priced close-in bookings aggressively in June.

"If maintained, this would add revenue confidence even as demand slows heading into early winter. While resurgent Covid-19 infections pose the risk of a false start, we have yet to see evidence of sliding bookings, as experienced by US carriers," said Berenberg.

However, Berenberg did highlight that Easyjet's higher breakeven load factor did merit conservatism in the group's capacity restart.

"We expect Easyjet's third-quarter interim management statement to highlight slow demand progress. Many airlines' messaging, in our view, will reinforce a positive feedback loop by outlining customer safety and comfort, areas in which easyJet excels."