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Jan 24 2022, 06:45 GMT
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||396c|
|Wizz Air Holdings||UNDERPERFORM||21/04/21||Neutral||09/09/19||4523.0p|
Airline stocks are early cyclical and should outperform in periods of margin expansion. We favour LCCs but relative performance will be nuanced. With market capacity down >10% this summer and geographical bias to Ireland/UK, we favour Ryanair (PT increased to €19) and easyJet (‘Outperform’ from ‘Neutral’, PT £7.2). Of the networks, Lufthansa’s balance sheet is strongest, with cargo promising and Lufthansa Technik undervalued (‘Outperform’ from ‘Underperform’, PT €8m). Demand recovery could be dramatic, but airlines are still sensitive to geopolitical events, seven-year-high oil prices and rising carbon costs.