Airlines are heading for some decent upgrades after strong traffic numbers in the last three months of 2022, according to analysts at JPMorgan.
Shares in the sector have already risen by 48% in the past three months on the basis of a resurgence in air travel, but the US bank's analysts still see potential for more to come due to structural issues such as a lack of planes.
Across the sector, the analysts have on average raised their EBIT earnings forecasts by 12% for full-year 2022 and by 5% for full-year 2023.
“Despite carriers aiming to grow capacity materially year-on-year, the unavailability of aircraft and continuing pent-up demand could offer a more supportive pricing environment than most would have expected a few months ago," they said in a note to clients.
On specific airlines, the JPMorgan analysts said British Airways owner International Consolidated Airlines Group SA (LSE:IAG) (IAG) is a 'hold', though on "positive catalyst watch". Ryanair PLC and Wizz Air PLC are rated ‘overweight’, with easyJet PLC still the ugly duckling at ‘underweight’.
Shares in IAG rose by 0.9% to 158.7p on Monday, while Wizz Air was up 0.4% to 2,862p, and easyJet added 2.5% to 442p.