Liberum ups target price on 'long-term winner' EasyJet

27th Nov 2018 10:34

(Sharecast News) - Liberum upped its target price on low-cost carrier EasyJet on Tuesday, but despite the airline's "strong long-term fundamentals", the broker remained cautious regarding its short-term prospects.Liberum bumped its target price on EasyJet up to 1,350p from its previous 1,250p marker as it continues to see the budget airline as being amongst the "long-term winners in the European airline industry"."It has a well-developed network focussed on slot-constrained primary airports in attractive cities. These offer strong demand for air travel for diverse purposes, protected by barriers to entry and competing predominantly against legacy airlines with less efficient cost bases."On the other hand, Liberum analysts warned that recent moderation in fuel prices, if sustained, could provide some relief to EasyJet's weaker competitors.While unit revenues were under pressure in the winter against tough comparatives flattered by Easter timing and the demise of Air Berlin and Monarch, Liberum said Summer "remains the key to profitability"."But while forward bookings are stronger, revenue visibility remains limited. We update our fuel cost assumptions for the recent moderation in prices, which sees our earnings estimates rise by 6-14%."Liberum also reiterated its 'hold' rating on the company's stock.