In a note on Tuesday, the investment bank upgraded the budget carrier to ‘neutral’ from ‘sell’, noting that the coronavirus pandemic has “altered the landscape” of the European airline industry.
“The recovery path might vary across the sector”, analysts said, although they forecast that supply rationalisation will be “the main positive outcome from the pandemic” with “a potential pricing power in the coming years”.
“However, on costs the industry is facing structural headwinds such as environmental charges and route charges. Against this mixed backdrop, we believe investors should spread their wings across low cost and legacy carriers for winners”, Citi said.
Aside from their upgrade of easyJet, the bank said they preferred Ryanair Holdings PLC (LON:RYA) and Wizz Air Holdings PLC (LON:WIZZ) among the low-cost airlines and British Airways owner International Consolidated Airlines Group SA (LON:IAG) among legacy carriers.
Shares in easyJet jumped 2.5% to 998p in mid-morning trading, while Ryanair rose 1.6% to €16.90, Wizz Air climbed 1.8% to 5,066p and IAG was up 1.4% at 200.6p.