easyJet PLC (LON:EZJ) has been double upgraded to ‘buy’ from ‘sell’ by analysts at UBS following a coronavirus0inpsured sell off that has seen the stock slump 33% since the start of the year.
The Swiss bank, which also hiked its target price to 1,300p from 1,275p, said the airline’s “volumes, pricing and margins are now under pressure due to the outbreak”, however they expected the impact of the virus to be contained mainly within the firm’s current financial year and that the shares now offered “a more balanced risk/reward”.
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While UBS did expect the company to report “materially weaker” summer bookings in its first half results on 14 May, they said the industry capacity backdrop remained “somewhat supportive” and expected several rival bankruptcies to remove capacity in the sector.
“We see EZJ as one of the "best of breed" [low cost carriers] in Europe and think it should continue to take market share from the majority of network carriers”, UBS said.
Investors, however, were more sceptical as easyJet’s shares slipped 3.9% to 962p in late-morning.