Shares in low-cost carriers (LCCs) have taken off following the scrapping of pre-departure Covid-19 tests and removal of all countries from the ‘red list’ in the UK, but now are high enough suggests Deutsche Bank.
The onset of Omicron-related concerns sent shockwaves through the entire economy, said Deutsche Bank (DB) analyst Jamie Rowbotham, but even with this, since the day before the newest Covid-19 variant’s arrival (25 November), EasyJet PLC, Wizz Air Holdings PLC (AIM:WIZZ), and Ryanair Holdings PLC (LSE:RYA) have climbed 12%, 9%, and 6% respectively.
DB has downgraded EasyJet from ‘buy’ to ‘hold’ while reducing its price target to 680p from 720p – though this is still 10% above its Wednesday afternoon share price of 623.2p.
Wizz Air remains a ‘buy’, despite a lowered price target of 5,600p from 5,800p.
Omicron has also prompted a reduction in the broker’s short-term traffic forecasts along the lines of those pencilled in for Ryanair on 23 December.