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Investing.com - Bernstein SocGen Group has lowered its price target on EasyJet Plc. (LON:EZJ) (OTC:ESYJY) to GBP5.60 from GBP5.75 while maintaining a Market Perform rating. According to InvestingPro data, the airline currently trades at an attractive P/E ratio of 9.03 and shows a robust free cash flow yield of 22%, suggesting potential undervaluation.
The adjustment follows what the research firm described as "another surprise-free quarter" from the airline, despite a dip in share price. EasyJet’s Q2 profit before tax aligned with consensus expectations, and its broad outlook remains unchanged. InvestingPro analysis reveals the company maintains a "GREAT" financial health score, with revenue growing at 9.43% over the last twelve months.
Bernstein SocGen noted key operational factors for EasyJet including 9% capacity growth planned for 2025, headline cost per available seat kilometer excluding fuel remaining broadly flat year-over-year, and a modest year-over-year decline in summer revenue per available seat kilometer.
The firm lowered its estimates by approximately 5% over the next three years, citing more expensive fuel as the primary factor behind the adjustment.
While describing EasyJet as "reassuringly steady in an often volatile industry," Bernstein SocGen expressed concerns about the airline’s demanding capital expenditure ramp in coming years and likely expansion into more competitive markets.
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