Citigroup raises estimates and price target for Easyjet

6th Oct 2014 10:55

Citigroup has raised its profit estimates and price target for Easyjet after the budget carrier last week upgraded its guidance for this year.The broker said it now expected Easyjet to report 2014 pre-tax profits of £577m rather than the £545m it had penciled in beforehand. It also upped its 2015 estimate to £614m from £590m and its 2016 forecast to £725m from £700m previously.EasyJet said on Friday that a strong end to the year, a strike at rival Air France-KLM and lower-than-expected fuel costs meant it was likely to make pre-tax profits in the year to 30 September of between £575m and £580m compared to its previous forecast of £545m to £570m.Citigroup kept its 'buy' rating on the airline but raised its target price to £16.70 from £16.The broker's Andrew Light said he expected the airline's revenue per seat in the first half of 2015 to fall by about 1-1.5% due to the weakness of the euro and ongoing over-capacity at Gatwick airport in southern England.But he added that revenue per seat should rise by a similar amount in the second half of the year."We expect easyJet to handle any industry over-capacity," he said.Easyjet shares rose 14p or 1% to 1473p at 11:21 in London.