Brokers downgrade Ryanair and easyJet
25.04.08
ABN Amro downgraded Europe's two biggest low-cost airlines to hold from buy, citing record oil prices and weakening consumer confidence. It downgraded its share price target for Ryanair from €4.70 to €2.80 and also cut its forecast for easyJet. Citigroup also cut its price target on Ryanair, from €4.40 to €3.80.
ABN analyst Andrew Lobbenberg wrote in a research note: ‘We are not surprised that many investors would not want to touch airlines with a bargepole. Our core strategy for investing in airlines is to buy into the sector when things are at their grimmest, to sell when times are good. We are getting closer, but will not be at that point until the revenue outlook weakens.’
The broker has also cut is British Airways target to 200p from 260p. It also cut the Air France-KLM price target to €18 from €21. Citigroup has also reduced its target price on British Airways to 330p from 400p, with an easyjet target of 288p and a Ryanair target price of €3.80.
Ryanair shares were up 5.5 percent at €2.78 and easyJet shares up 3.06 percent to £2.9675 today on the back of oil price falls in the last couple of days. BA shares were up 4.00 percent to 221.25p.
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