Broker snap: Currency tailwinds to lift easyJet

25th Mar 2010 08:23

The absence of a chief financial officer and the impending departure of its chief executive officer does not seem to be holding back no-frills airline easyJet much, according to Nomura Securities, which rates the shares as a 'buy'.The Japanese broker has adjusted its forecasts for easyJet to factor in a better revenue environment, underlying cost cuts and the deterioration of sterling value against the US dollar. The net effect is an upgrade to its 2010 profit before tax forecast from £140m to £185m and an increase in the broker's valuation of the stock from 420p to 500p.Nomura analyst Andrew Evans said he is now assuming ticket prices will fall 0.5% in 2010, having previously plugged in a 4% fall in ticket prices into his spreadsheet model. The new figure reflects 'better underlying pricing owing to network mix and currency effects,' though some of the currency benefit is offset by expectations of rising costs; previously Evans had expected costs to remain flat in 2010.