Shares in easyJet PLC rose 2.8% after a well-received presentation on its Holidays business on Thursday.
Bank of America said Holidays CEO Garry Wilson presented a “compelling case” for how the business will maintain its strong growth trajectory and take share from competitors in the UK, with a view to eventually surpassing them and becoming the top operator in the market.
The business boasts a model that is hard to replicate, underpinned by a network that far exceeds that of tour operator peers, it explained.
BofA thinks Holidays will be a key part of the medium-term growth story at easyJet.
It raised 2024 pretax profit forecasts by 10% to £645 million and increased its price target to 730p from 690p.
Barclays upgraded easyJet from 'equal weight' to 'overweight' and raised its price target to 700p from 450p.
It said the seminar indicated the medium-term term goal for Holidays of £250 million pretax profit is most likely to occur in financial 2026.
It said the 5-10% market share growth should come from converting two-thirds of the company's existing customers flying during do-it-yourself holidays into full-service customers, one-fourth from legacy tour operators and a sixth from online travel agency (OTA) customers travelling on other airlines.
Barclays explained the rating upgrade reflected increases to financial 2024 and 2025 pretax profit forecasts of 33%, taking it above consensus.
“easyJet has the optimum growth fleet at this time and Barclays has a favourable view of its Holidays business,” it added.
Barclays also upgraded Wizz Air to 'equal weight' from 'underweight' with the price target upped to 2,200p from 1,750p.
It thinks any signs of easing tensions in Israel and Ukraine will be supportive for prospects.
It held off upgrading to 'overweight' because it thinks the substantial one-time gains that the company expects to benefit from in 4Q24, will come at the price of future profitability.
Barclays expects strong unit revenues in financial 2025, but expects significant unit cost pressures.
Shares in Wizz Air are more than 10% higher - the business also released passenger numbers on Friday.