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easyJet flies higher on broker upgrade, increased passenger numbers

Kepler moved the budget airline up to a ‘buy’, while passenger stats for February were solid

easyjet plane
easyJet has flown more than 75mln passengers over the past 12 months

It was a decent Monday morning for Easyjet PLC (LON:EZJ) shareholders, with a recommendation upgrade from a top French broker and solid passenger statistics for February boosting the share price.

Shares were up 19p, or 2%, to 975p in early deals on Monday.

The stats for last month showed an 8% year-on-year rise in passenger numbers to a shade over 5.3mln passengers, while the all-important load factor which measures how full the planes are jumped 1.6 percentage points to 92%.

Over a rolling 12-month period (i.e. February 2016 to February 2017), the low-cost airline carried 75mln passengers across its 874 routes; 7% more than it did in the previous year.

Load factor across the year-long period was unchanged at 91.6%.

Also buoying the share price was the upgrade from Kepler Cheuvreux, with the French broker saying it prefers Easyjet to its Irish rival Ryanair Holdings PLC (LON:RYA) for the first since it started covering the stocks three years ago.

Analyst Ruxandra Haradau-Doser reckons Easyjet was “over-proportionally impacted” by last year’s terrorist attacks, while she also expects pricing trends to improve significantly over summer.

Restructurings at Gatwick should also yield “positive surprises” in terms of easyJet’s cost structure, Haradau-Doser adds, while there also might be a Brexit boost for the carrier.

“easyJet currently owns 74% of its fleet. Aircraft are US dollar denominated and  the  currency  movements  have  significantly  increased  the  value  of easyJet’s  fleet  in  British  pounds,” the analyst said.

“We think that easyJet  should  trade  at least at the value of its fleet. Based on our analysis, we estimate the value of easyJet’s owned fleet at £4.2bn.”

As a result, the broker has upped its recommendation from ‘hold’ to ‘buy’, while it has also raised its target price from £10.53 to £11.06; an upside of almost 15%.

Quick facts: easyJet plc

Price: 543.2 GBX

LSE:EZJ
Market: LSE
Market Cap: £2.16 billion
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