easyJet PLC (LSE:EZJ) is pitched as an 'outperform' rated stock over at RBC Capital Markets, with analysts describing the travel operator's stock as offering "growth at a reasonable price".
It comes despite a minor cut to the broker's FY26 profit forecasts.
Analysts at RBC clipped their price target to 590p from 620p, in the recent wake of easyJet’s FY25 results, citing a larger-than-expected carbon cost headwind in FY26.
Nevertheless, the Canadian bank's profit before tax forecasts for FY27 remain intact, and, analysts say the valuation remains supportive, with the shares trading on around 7.2x 12-month forward PE and an 8% EPS CAGR expected between FY25 and FY28.
RBC sees scope for further earnings growth through several internal levers. These include continued expansion of the Holidays division, which delivered £250 million profit in FY25, and could drive to £450 million by FY30, according to the bank, whilst fleet 'upgauging' to more efficient aircraft potentially adding further impetus. Also, analysts note that winter losses are expected to reduce in future years.
“We see a more favourable outlook for European airlines than relatively undemanding valuations suggest,” RBC said, adding that easyJet is well positioned in a capacity-constrained market.
The bank values the stock at 7.9x FY27 earnings, midway between its 10- and 20-year average multiples, and analysts claim the airline’s relatively low capital intensity and solid returns profile provide further investor appeal.