Broker snap: Citigroup ups forecasts for easyJet

20th May 2013 09:23

Budget airline easyJet was flying high on Monday morning after both Deutsche Bank and Citigroup lifted their target prices for the stock following last week's first-half results.The stock was also rising in sympathy with fellow carrier Ryanair which reported a record annual profit despite higher oil costs.Shares in easyJet were up 4.49% at 1,241.35p in early trading after Citigroup said that it has raised its earnings estimates for the firm by around 10% for the next three years due to a better revenue outlook and lower fuel costs assumptions.The broker now expects the airline to report a profit before tax (PBT) of £437m for the year to September 30th 2013, up from the previous estimate of £413m. Full-year PBT in the years ending 2014 and 2015 are forecast to be £489m and £548m, respectively.Furthermore, the broker said that even stronger free cash flow - balance sheet net cash is expected to rise from £433m currently to over £1.2bn by 2015 - supports the potential for additional shareholder returns.Citigroup kept its 'buy' recommendation for the stock and raised its target price from 1,210p to 1,330p.Deutsche Bank meanwhile raised its target price from 1,040p to 1,370p and maintained a 'buy' rating.BC