easyJet shares downgraded to ‘sell’
27.08.08
Analysts at Deutsche Bank have downgraded easyJet from ‘hold’ to ‘sell.’ The target price has been reduced from 251p to 212p. The shares were trading at 317.25p at 11:00 today.
In a research note published this morning, the analysts say that the airline has announced plans to scale back capacity growth in winter. The absence of a fare recovery in 3Q and a slowdown in capacity growth would, however, make it difficult for easyJet to cut unit costs, the analysts add.
The airline’s ability to improve profits going forward is highly dependent on income ramp up from the sale of holiday related services, JP Morgan says. The FY09 EPS estimate has been reduced to breakeven.
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