Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com -- JPMorgan has cut its rating on EasyJet (LON:EZJ) to Neutral from Overweight, placing the stock on Negative Catalyst Watch ahead of the carrier’s full-year results in November.
Its price target on the stock was cut to 500p from 670p.
The move comes as the bank flags mounting concerns for Europe’s short-haul market, citing a mix of rising capacity, weaker pricing, and cost pressures that could weigh on earnings.
“European short-haul capacity growth is expected to accelerate into winter against an uncertain economic backdrop, with the U.K. an area of potential oversupply,” analysts led by Harry Gowers said in a note.
U.K. leisure routes, particularly into Mediterranean and “winter sun” destinations, have seen sharp seat growth since 2019, leading to what JPMorgan described as a saturated market.
Pricing trends have softened over the summer, with JPMorgan cutting its revenue per seat forecast for easyJet in the current quarter.
The bank said negative RASK (Revenue per Available Seat Kilometer) could persist into winter as easyJet’s 9% ASK growth combines with rising competition from Jet2, a high level of new route launches, and “potential for U.K. consumer uncertainty in and around the autumn budget.”
“We would caveat that Q2 comps are weak and there should be some earlier Easter benefit. However, we model RASK -0.5% in H1,” the analysts said.
The team warned that “progress on reducing winter losses could disappoint the market,” pointing to expected pre-tax losses of £413 million for the first half of fiscal 2026, deeper than last year’s £394 million.
They also highlighted the risk that fares remain weak into winter just as carriers face higher environmental charges, tougher fuel comparisons, and sticky ex-fuel inflation.
Reflecting these headwinds, JPMorgan lowered its profit before tax (PBT) estimates for September 2026 by 13% and now sits about 11% below Bloomberg consensus.
While acknowledging that the carrier’s shares are already down 15% year-to-date and trade on a relatively undemanding seven times 2026 earnings, the bank argued that valuation looks “closer to current fair value given our lower future PBT CAGR, now at +7% compared to +14% previously, and with limited FCF generation and scope for future buybacks."
Among low-cost carriers, JPMorgan maintained Ryanair (NASDAQ:RYAAY) and Jet2 (LON:JET2) as its top picks, citing stronger cash generation and more attractive valuations.
Wizz Air (LON:WIZZ) remains rated Neutral amid uncertainties around estimates and ongoing strategic changes.