RBC upgrades Easyjet on more positive summer outlook

27th Mar 2015 09:37

Easyjet's shares were flying higher on Friday after a sharp descent the previous session, with analysts at RBC Capital Markets providing a lift after upgrading their view on the airline from 'sector perform' to 'outperform'.The broker, which hiked its target price for the shares from 1,800p to 2,000p, said consensus forecasts for the company look "too gloomy".Easyjet upgraded its guidance for the first half on Thursday, though a spike in oil prices prompted a sharp drop in stocks across the travel sector.According to RBC analysts Damian Brewer and Andy Jones, the summer outlook for European airlines has become more positive.Current consensus forecasts for the year ending September 2015 point to a profit before tax of £672m, which implies revenue per seat in the summer falling by 1.4% year-on-year. "We see a better outcome", Brewer and Jones said."We see a rising prospect that easyJet can report stable (not falling) pre-FX revenue/seat for summer 2015 and thus lift our diluted earnings per share forecast to 140p. Within Europe, we see the prospect of a balanced supply/demand outlook enabling fuel gains to be retained (we do not see this for long haul)," they said.Easyjet was trading 1.5% higher at 1,865p by 10:29.