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Investing.com - Bernstein has lowered its price target on EasyJet Plc. (LSE:EZJ) to GBP5.20 from GBP5.60 while maintaining a Market Perform rating, citing concerns about revenue per available seat kilometer (RASK) dilution.
The research firm expects summer RASK to decline by low to mid-single digits, partly due to sector lengthening. Bernstein’s Q4 EBIT estimates are 5-6% below consensus, prompting the reduction in price target in line with lower run-rate earnings estimates.
Bernstein notes that intra-European capacity growth is beginning to increase into winter with a 6% rise in the December quarter, driven by Ryanair and Wizz Air. This competitive environment presents challenges for EasyJet, which continues to expand amid growing ultra-low-cost carrier competition.
The phase-out of Emissions Trading System (ETS) allowances is expected to impact EasyJet harder than peers due to its UK market concentration. UK ETS allowances face a complete reduction in 2026, compared to the staggered reduction of EU allowances.
Despite these challenges, Bernstein highlights that EasyJet’s Holidays segment continues to perform well, with full-year profit before tax guidance set at €235 million. The company is scheduled to present its annual results at the end of November.
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