easyJet: shares jump on broker upgrades.

(CercleFinance.com) - Shares in easyJet are up over 2% on Tuesday morning after RBC upgraded the stock, regarding as "increasingly probable" that the low-cost carrier's earnings have already bottomed down.


The broker has upgraded its rating from "underperform" to "sector perform," with a new target price of 1,325 pence, versus 875 pence.

In a note sent to clients, RBC cites a "growing chance EBITDAR margin has troughed, with an increased chance of multiple expansion in advance of margin improvement."

The broker also mentions an "improving demand."

As the shares already price in a 70%-75% chance of improvement, according to the professional, a move to "outperform" would require "big" but likely upgrades, RBC said.

Note that UBS - which has a "buy" rating on the shares - has also raised its target price from 1,110 pence to 1,425 pence, saying this could be the end of a turbulent nine-month period.

easyJet shares were up 2.1% at 1,296 pence in morning trading on the London Stock Exchange, compared to a 0.2% rise in the FTSE 100 index.

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