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Apr 21 2021, 06:30 IST/BST
Airlines
Positive thesis unchanged, even if recovery is moving to the right; inflection point is coming
- Sectors : Airlines
- Companies : Lufthansa | easyJet | Air France KLM | IAG | Wizz Air Holdings | Ryanair Holdings | Norwegian Air
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| Air France KLM | UNDERPERFORM | 11/05/20 | Neutral | 20/01/20 | 503c |
| easyJet | OUTPERFORM | 22/01/21 | Neutral | 19/11/20 | 987p |
| IAG | NEUTRAL | 12/08/20 | Outperform | 31/08/18 | 210.2p |
| Lufthansa | UNDERPERFORM | 08/06/20 | Neutral | 30/10/18 | 1078c |
| Norwegian Air | NEUTRAL | 01/09/15 | Underperform | 22/01/15 | 5940nok |
| Ryanair Holdings | OUTPERFORM | 07/12/09 | Neutral | 02/11/09 | 1608c |
| Wizz Air Holdings | UNDERPERFORM | 21/04/21 | Neutral | 09/09/19 | 4877.0p |
DAVY VIEW
We see an ‘inflection point’ coming. Despite the noise, we believe that Mediterranean countries will open in scale for peak/late summer. While the transatlantic could open by mid-May, traffic levels will be subdued, certainly eastbound. Corporate/emerging markets will be further behind. We prefer low-cost carriers (LCCs), given their nimbler route deployment, over network carriers. We favour Ryanair (‘Outperform’, price target €18, unchanged) and easyJet (‘Outperform’, price target up to £10.8) but downgrade Wizz to ‘Underperform’ on the basis of valuation. Among the networks, we still favour IAG (‘Neutral’), with both continental groups (Air France-KLM and Lufthansa) continuing remedial work on their capital structures.
