easyJet PLC’s future looks encouraging according to Peel Hunt, which outlined that the airline’s results had few surprises and the shares remain “undervalued”.
Repeating a ‘buy’ rating for the low-cost airline, the broker took a positive view and kept its share price target at 550p, which offers more than 40% of upside after the shares fell 3% on the day to below 382.9p.
Peel Hunt outlined that the FTSE 250-listed group had confirmed very similar figures to analyst’s forecasts, having delivered a trading statement only last month, though net debt was slightly better than expected but predicted 2023 capacity and load factor were marginally lower than expected, though forecasts benefit from the recent US dollar weakness.
The headline number was the reduction in losses to £178mln from £1.1bn last year, with revenue having increased 296% to £5.8bn, amid the airline industry’s recovery following the pandemic.
Management expects pre-pandemic trading levels to return by the end of next year, anticipating that its prices will entice customers.
The broker added: “The group is investing in operational resilience by starting the recruitment programme already,” amid rising costs fuelled by inflation.
Chief executive Johan Lundgren highlighted that the budget carrier has “one of the strongest balance sheets in European aviation” and is “ready to take opportunities as they present themselves.”
Earlier this week easyJet was involved in a world first as it partnered with Rolls-Royce for the testing of a hydrogen-powered jet engine, something that could bode well for the airline unlong-term as it looks to reach a 2050 net zero-target.