Credit Suisse sees profit recovery at Easyjet

The Swiss broker marked up its estimates for the company's revenues per seat, due to improved summer trends, from -2% and -4% for the third and fourth quarters of 2017, respectively, to -1% and -3%.

That drove a 7% increase in their estimate for the airline's 2017 profit before tax to £420.0m. Credit Suisse also raised its 2018 estimate for the company's profit before tax by 17% to £534.0m.

Combined, those revisions saw the analysts bump up their target price on the shares by 24% to 1,583p.

The analysts anticipated that market confidence in a return to 2013-2014 levels of profit before tax per seat of between £7 to £8 would build on the back of three factors: more moderate competitive growth, a normal winter (which would secure a recovery in 2018) and the existence of growth opportunities.

"Convergence with legacy competitor pricing is possible over time as carrier products harmonise, and following a 12% two year decline to 2017E, a 2%

pricing recovery in a healthy market would see 2013's £7 PBT per seat return."