Darkest before the dawn: That was the rather poetic title line a leading broker used to introduce its updated and rather more positive assessment of easyJet PLC (LON:EZJ).
Remember, the budget carrier has been in the wars of late – at least in stock market terms.
The collapse of the pound and terror concerns, which has hit travel to destinations in North Africa and Turkey, led the airline to sound the earnings alarm earlier this month.
The stock fell sharply in the aftermath, although it has pulled back a little since and is down just 6% since the warning.
Two prior alerts helped wipe 45% off the value from the stock – and there is some suggestion that easyJet may now be ‘oversold’.
A note from the well-ranked transport team at UBS helped alleviated the stress at put the shares back on the ‘buy’ list.
Okay, the Swiss bank’s number crunchers have pegged their valuation a tad – to £10.50 a share from £10.70 – but the upgrade was enough to propel easyJet to the top of the FTSE 100.
“Based on current forecasts easyJet's valuation appears favourable compared to the historic trading multiples,” UBS told investors. “We now place easyJet on a slight recovery multiple.”
UBS would seem to be in the minority, according to the Broker Forecasts site.
Of the 20 analysts polled, only six are ‘buyers’ of the stock, with five ‘sellers’. The remainder think the easyJet is fully valued, while the consensus target price is around £1 ahead stock’s current market valuation.
The shares rose 3% to 945p.