Airlines & Other Transport

Time to go long short(haul)

  • Sectors : Airlines & Other Transport
  • Companies : Norwegian Air | easyJet | IAG | Air France KLM | Ryanair Holdings | Wizz Air Holdings | Lufthansa

Ratings

Ratings and price correct at time of issue

Company Rating Date Previous Rating Date Closing Price
Air France KLM OUTPERFORM 21/01/19 Neutral 22/01/18 953c
easyJet NEUTRAL 20/06/18 Outperform 12/12/17 1140p
IAG OUTPERFORM 31/08/18 Neutral 22/08/17 611.4p
Lufthansa NEUTRAL 30/10/18 Outperform 27/01/17 2067c
Ryanair Holdings OUTPERFORM 07/12/09 Neutral 02/11/09 985c
Norwegian Air NEUTRAL 01/09/15 Underperform 22/01/15 17400nok
Wizz Air Holdings OUTPERFORM 20/06/18 Neutral 21/06/16 3014.0p

DAVY VIEW

We think earnings momentum in the European airlines sector will inflect positively as we exit the winter trading season. Industry consolidation, reduced capacity growth and moderating fuel costs should support EPS upgrades as the year progresses. Meanwhile, sector valuations are pricing in a much bleaker outlook, as evidenced by Ryanair’s muted share reaction to its guidance downgrade last week. Our preferred names are Ryanair and Wizz. We also think risk/reward screens attractively for Air France-KLM; with catalysts to come, we upgrade the stock to ‘Outperform’.

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Jan 21 2019, 06:30 GMT

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