Easyjet slides as oil spikes, but Credit Suisse welcomes strong first half

26th Mar 2015 11:49

Shares in Easyjet and a number of other travel stocks took a hammering on Thursday from the spike in oil prices, though the budget airline did manage to impress analysts with its latest trading update.Credit Suisse maintained an 'outperform' rating and 2,050p target price for Easyjet after first-half numbers beat expectations due to favourable currency movements.The company lifted its guidance for results for the six months to 31 March and now expects a pre-tax loss of £5m to a profit of £10m for the period, compared with the anticipated loss of £10m-30m initially.The airline also raised its guidance for revenue per seat (RPS) at constant currency growth from 2% to 2.5%.Credit Suisse now sees a profit of £6m for the first half, better than the £10m loss it had originally pencilled in. However, the bank left its full-year predictions unchanged as FX tailwinds are expected to unwind in the second half.Nevertheless, it remained upbeat about Easyjet's pricing growth and said the outlook is "conservative but comforting".While RPS is forecast to fall over the second half as lower fuel prices lead to lower fares, Credit Suisse said: "We expect a strong 1H to comfort excess market capacity concerns with early 2H bookings 'in line with last year'."The bank pointed out that Easyjet trades at 14.1 times estimated earnings for 2015, compared with Ryanair which trades at a multiple of 15.7.Easyjet was trading down 4.2% at 1,810p by 11:49, as the price of Brent crude jumped 3.7% to $58.56 a barrel.