Deutsche Bank upgrades easyJet, but no uplift for share
The analyst has upgraded his rating on the British carrier from "sell" to "hold," while increasing his TP from 340 Pence to 540 pence. However, this better opinion has clearly had very little impact on the stock, which has failed to get off the ground today.
According to Deutsche Bank, investment fund Castlelake's interest in easyJet should be taken seriously given its expertise in aviation investment and leasing. In 2023, Castlelake had already led a transaction involving SAS, acquiring aviation assets under cyclical pressure. After optimizing them, the fund exited the position.
Furthermore, Castlelake already maintains a commercial relationship with the airline through the leasing of four A320neos and holds a 2.14% stake in the capital.
However, Deutsche Bank believes that other partners would likely be necessary in any potential deal to comply with European ownership and control rules. Indeed, the presence of an EU-based partner would allow Castlelake to meet regulatory requirements for airline shareholding, which mandate majority control by European entities, including for UK carriers since Brexit.
Last week, the name of Mediterranean Shipping Company (MSC) was mentioned by the Italian press, as was Air France-KLM. On Monday, on the sidelines of the IATA conference in Rio, the CEO of Air France-KLM stated that he would be willing to pick up the phone if Castlelake called to discuss a proposal.
easyJet plc is a United Kingdom-based point-to-point airline company. The Company's segments include airline business and holiday business. Its airline business operates a route network. It includes approximately 355 aircraft, operating 1,207 routes across 38 countries and 164 airports. Its holiday business sells package holidays. Its destinations include Northern Ireland, Scotland, Channel Islands, England, Austria, Bulgaria, Cape Verde, Croatia, Cyprus, Czech Republic, Denmark, Egypt, France, Germany, Gibraltar, Greece, Hungary, Iceland, Italy, Malta, Monaco, Montenegro, Morocco, Netherlands, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, Tunisia, Turkey and more. It offers a customer application for booking and boarding the aircraft. It also includes self-service tools for managing disruption via the application. It caters to multiple market segments including business, visiting friends and family (VFR) and leisure demand.
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