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Air Berlin outlook rated 'neutral'; easyJet and Ryanair downgraded; Valencia is Ryanair’s 43rd base

Analysis

Shares in Air Berlin were 1.5% lower yesterday, after gaining 1.1% on Tuesday. Also on 22-Jun-2010, SADI-Investment Analytics applied its StockMarks stock-rating system to Air Berlin, adding that Air Berlin is an "above average quality company with a neutral outlook".

Summary
  • Air Berlin's shares were slightly lower, but the company is considered above average quality with a neutral outlook.
  • EasyJet's shares gained after a previous reduction, but JP Morgan downgraded the carrier's shares due to the expectation of full-service carriers outperforming LCCs.
  • Ryanair's shares were downgraded by JP Morgan and the airline announced plans to open a new base at Valencia Airport.
  • Vueling, Cimber Sterling, and Norwegian Air Shuttle experienced a decline in their share prices.
  • Air Berlin and Deutsche Lufthansa AG show similar undervaluation, but Air Berlin is more likely to outperform the market.
  • SADI-Investment Analytics applied its StockMarks stock-rating system to Air Berlin, highlighting the company's strong business growth and efficient management.

The company added: "Air Berlin Plc has strong business growth and is run by efficient management. When compared to its closest peer, Deutsche Lufthansa AG, Air Berlin Plc shows similar undervaluation and is more likely to outperform the market."

Meanwhile, shares in easyJet gained 1.2% yesterday, following a 3.1% reduction on Tuesday, after JP Morgan Cazenove downgraded the carrier's shares from 'overweight' to 'neutral', due to the expectation that full-service carriers will soon start outperforming LCCs.

Ryanair's shares were down 0.7% yesterday, adding to a 0.1% reduction the previous day. JP Morgan also downgraded Europe's largest LCC from 'overweight' to 'neutral'.

In other Ryanair news, the carrier announced plans to open its 43rd base - at Valencia Airport - from Nov-2010, with two aircraft based there and 31 routes (with 260 weekly frequencies).

Elsewhere in Europe, Vueling shares slipped 2.6%, with Cimber Sterling and Norwegian Air Shuttle also weaker, down by 2.3% and 2.0%, respectively.

Selected LCCs daily share price movements (% change): 23-Jun-2010

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