EasyJet Cut to Hold as Macro Uncertainty Rises

Deutsche Bank downgraded easyJet (LON: EZJ) to Hold from Buy, reducing its price target for the stock to 600p from 715p, citing rising macroeconomic and geopolitical uncertainty.

In a note to investors this week, Deutsche Bank stated these challenges “could remain the case for the foreseeable future,” affecting the outlook for European transport companies. 

EasyJet shares fell 1.5% on Thursday and are down 0.2% so far in Friday's session.

The downgrade comes as part of Deutsche Bank’s analysis of the broader European travel market. 

The bank explained that GDP drives earnings in the sector. As a result, “it should not be surprising that we see the need to cut forecasts for a number of our companies.”

In its trading update for the quarter ended December 31, 2024, reported in late January, EasyJet said that its outlook for booking trends was supportive of the FY25 consensus. 

Forward bookings showed that Q2 was 57% sold, with Q3 26% sold, and Q4 13% sold.

The low-cost carrier also said  H1 underlying winter losses were expected to reduce when adjusted for the timing of Easter and a prior year release of aged balances.

Deutsche Bank’s call follows another revision from Morgan Stanley. The bank lowered its price target on easyJet to 680p from 720p while maintaining an Overweight rating.