Credit Suisse ups target on 'multi-year value proposition' easyJet

25th Mar 2014 10:56

Analysts at Credit Suisse have lifted their price target on shares of easyJet to 2,021p from 1,988p following today´s pre-close trading update and improved guidance for the first half of 2014 from the budget airline, while reiterating their 'outperform' recommendation on the shares. Significantly, they point out how the stock is now trading on an enterprise value-to-operating profits ratio of 8.3 times and a price-to-earnings multiple of 14.6 times, both represent a discount to its main peer RyanAir despite easyJet's higher returns and cash flow generation. Hence, they believe easyJet should trade at a premium. As a result of better pricing and lower cost inflation they now estimate that easyJet will post a smaller loss before tax for the first half of £56m, versus the £67m which they had previously been forecasting.For the full year Credit Suisse raised their pre-tax profit estimate 2% to £576m and their price target by another 2% to 2,021p. "We continue to see easyJet as a multi-year value proposition", the broker said, adding that the company should be able to capitalise on attractive medium term volume and pricing opportunities.As of 11:53 shares of the firm were higher by 4.47% at 1,710p.AB