easyJet was downgraded by UBS from “buy” to “neutral”, with UBS commenting, "while we still like the business model and see upside to forecasts, we think the shares will take a breather."
UBS added that its favourite carrier in the European LCC sector is now Ryanair, stating, "over the last 12 months, easyJet has outperformed Ryanair by over 25%. Furthermore, since the beginning of 2010, easyJet has outperformed Ryanair by over 10%. We think this is now over done and see more share price upside from Ryanair than easyJet."
Shares in easyJet slipped 0.5% on Friday, while Ryanair gained slightly (by 0.2%).
Separately, easyJet CEO, Andy Harrison, in an interview with Reuters, stated the carrier is “happy” with analyst forecasts for a pretax profit of GBP170 million in the full-year, after making a strong start to 2010.
Mr Harrison added, "yields will be up in the first-half and 2010 has been good for us so far", but added, "airlines are likely to see subdued demand in 2010 and I don't see a macro economic recovery taking place in 2010". Ancillary revenues, meanwhile, continue to rise, with double-digit growth expected in the current year for the LCC.
In Brazil, GOL’s shares slipped 2.0% on Friday, as investors sold off stocks in the nation’s airlines upon the release of data from ANAC which revealed a 27.5% decline in the average air fare in 2009, down some 30% from their high in 2002. Investors are now anticipating weaker earnings for GOL and TAM as a result, according to SLW Corretora.
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Selected LCCs daily share price movements (% change): 19-Feb-2010
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