easyJet’s shares were down 2.0% yesterday, after rising 35% over the past three months, as RBS cut its rating from ‘buy’ to ‘hold’.
RBS stated that while it "continues to like easyJet’s strategic long-term position, we think it now needs to demonstrate delivery of good cost performance to provide further impetus”.
RBS also warned that over the European Winter, the revenue environment will toughen significantly, and the carrier will need to improve its cost performance to improve margins" It added, the carrier’s strategy of using major airports will result in “limited flexibility to manage airport costs”.
Southwest and Allegiant share price target raised by Morgan Stanley
In the US, Southwest’s shares slipped 0.7% yesterday, despite the carrier’s price target being raised by Morgan Stanley from USD6 to USD7. The carrier’s rating remains ‘underweight’.
Allegiant Air (share price up 1.4%) also saw its price target raised by Morgan Stanley from USD46 to US49, with the rating, like Southwest, being ‘underweight’.
Selected LCCs daily share price movements (% change): 12-Oct-09