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Investing.com -- Deutsche Bank (ETR:DBKGn) adjusted its ratings and price targets for several European airlines.
Air France KLM (EPA:AIRF) was downgraded from Hold to Sell, with the price target unchanged at €8.50. EasyJet (LON:EZJ) was cut from Buy to Hold, and the price target was reduced from 715p to 600p.
At the same time, the bank upgraded Ryanair Holdings (NASDAQ:RYAAY) from Hold to Buy, and raised the price target from €20 to €25.50.
“We are facing higher levels of market, geo-political and macro uncertainty than usual and we think this could remain the case for the foreseeable future,” said analyst Andy Chu in a note.
“Whilst signals remain mixed we take the view that near term GDP risks for the U.S. and Europe are skewed to the downside. European transport company earnings are driven by GDP so it should not be surprising that we see the need to cut forecasts for a number of our companies,” he added.
For Air France KLM, this is the second downgrade this week. UBS analyst Jarrod Castle lowered the rating on the stock to Neutral from Buy, noting that although the company’s profit outlook has improved, the gains are “now reflected in the share price.”
Castle’s downgrade follows a difficult 2024 for the airline, which faced a €160 million cost linked to the Paris Olympics, operational disruptions at KLM, and limited control over ex-fuel costs. Despite these challenges, Air France KLM shares have risen about 14% year-to-date.
Interestingly though, Redburn Atlantic analysts upgraded Air France KLM this week, highlighting the airline’s transformation into a more streamlined and efficient business, which they believe has been overshadowed by the pandemic and other temporary factors.