Broker tips: easyJet, Next, FirstGroup

20th May 2013 10:56

Budget airline easyJet was flying high on Monday morning after Citigroup lifted its target price and kept its 'buy' rating for the stock following last week's first-half results.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.Nomura has downgraded its rating for High Street giant Next from 'buy' to 'neutral' after the recent strong performance in the share price.The broker said that while Next's management is "best-in-class", this is increasingly reflected in the stock's valuation. Increasingly returns have meant that the shares have re-rated strongly from January 2011 when they were trading at 8.4 times forward earnings - they now trade at a price-to-earnings multiple of 14.Jefferies has kept its 'hold' rating and 190p target price for transport firm FirstGroup, saying that while the full-year results on Monday were broadly in line with forecasts, the outlook statement was a little disappointing.Analyst Joe Spooner said he was disappointed as "nothing materially new appease to be being promised". "The group is targeting double-digit margins in UK Bus and First Student, but we knew that".BC