Proactive Investors -
- FTSE 100 up 40 points at 7,662
- US markets set to extend gains after Meta fireworks
- Wizz Air (LON:WIZZ) jumps as passenger numbers rise, upgrade
EasyJet rises after well-received Holidays seminar; Barclays upgrades
Shares in easyJet (LON:EZJ) rose 3.1% after a well-received presentation on its Holidays business.
Bank of America (NYSE:BAC) said Holidays CEO Garry Wilson presented a “compelling case” for how the business will maintain its strong growth trajectory and take share from competitors in the UK, with a view to eventually surpassing them and becoming the top operator in the market.
The business boasts a model that is hard to replicate, underpinned by a network that far exceeds that of tour operator peers, it explained.
BofA thinks Holidays will be a key part of the medium-term growth story at easyJet.
It raised 2024 pretax profit forecasts by 10% to £645 million and increased its price target to 730p from 690p.
Barclays (LON:BARC) upgraded easyJet from equal weight to overweight and raised its price target to 700p from 450p.
It said the seminar indicated the medium-term term goal for Holidays of £250 million pretax profit is most likely to occur in financial 2026.
It said the 5-10% market share growth should come from converting two-thirds of its existing customers flying during do-it-yourself holidays into full-service customers, one-fourth from legacy tour operators and a sixth from OTA customers travelling on other airlines.
Barclays explained the rating upgrade reflected increases to financial 2024 and 2025 pretax profit forecasts of 33%, taking it above consensus.
“EasyJet has the optimum growth fleet at this time and Barclays has a favourable view of its Holidays business,” it added.
Barclays has also upgraded Wizz Air to equal weight from underweight with the price target upped to 2,200p from 1,750p.
It thinks any signs of easing tensions in Israel and Ukraine will be supportive for prospects.
It held off upgrading to overweight because it thinks the substantial one-time gains that the company expects to benefit from in 4Q24, will come at the price of future profitability.
Barclays expects strong unit revenues in financial 2025, but expects significant unit cost pressures.
Shares in Wizz Air are more than 8% higher - the business also released passenger numbers on Friday.
Superdry more than doubles
It may be a quiet Friday but shareholders in Superdry - depending when they bought stock - will be feeling a bit better about life.
Shares more than doubled on Friday - up 112% - on the bid rumours - see my 9.35am update.
But before we get too carried away shares remain down 63% in the last 12 months.
Still, it's livening up things in the UK market.
10:33am: Jefferies upgrades Wise on upbeat prospects for Card business
More on the Jefferies upgrade on Wise Group PLC which has helped push shares 3.1% higher.
“We think Wise is at an inflection point in its Card business, generating the next leg of growth after FX transfers and neo-bank like products (assets, interest),” the broker said.
It added the newly launched JefData WATT corroborates its view on internationalization and user stickiness driving financial 2025/26 Ebitda estimates 23-57% higher.
This puts Jefferies 17% and 26% above consensus, it said.
It upgraded to buy from hold, with an increased price target of 1,024p, up from 717p. .
London rides on the wave of renewed US optimism
Blue-chips remain in the green lifted by the positive mood across the pond.
AJ Bell's investment director Russ Mould said while the scorecard for the Magnificent Seven in the current earnings season to date "is mixed, Amazon (NASDAQ:AMZN) and Meta certainly produced stand-out quarterly updates, with Meta unveiling a maiden dividend in what felt like a significant milestone."
He added that it "feels a healthier situation to have the markets driven by strong earnings and corporate success rather than ongoing guesswork about when central banks are going to cut rates."
9:35am: Superdry skyrockets on takeover talk, hedge fund takes stake - report
Shares in Superdry PLC (LON:SDRY) have leapt 64% after The Times reported a hedge fund has taken a 5% stake and increasing talk of a bid for the embattled retailer.
The Times reported a Norwegian-based alternative investment fund has bought a 5.3% stake in the Cheltenham-based retailer, according to regulatory filings.
It is understood that First Seagull considers Superdry to be ripe for a bid after a series of profit warnings over the past year drove down its share price.
Sycamore Partners, an American private equity company, and Authentic Brands Group, which owns Ted Baker (LON:TED) and Forever 21, are said to have Superdry on their radars, the report said.
The Times quoted sources who suggested that the value of Superdry owned by a brand management company would be about £400 million to £600 million, compared with its present market cap of about £34 million.
At their peak in early 2018 the company’s shares were just shy of £20, giving it a valuation above £1.7 billion.
The firm has struggled in recent times and reports this week said the firm was looking at cutting costs which could include store closures.
Close Brothers slides on downgrade, Electrolux warns
Elsewhere, AO World is down 0.3% and Curry’s is down 0.7%, missing out on the market rally which may reflect a warning from Electrolux.
The firm warned that weak demand will continue into 2024 causing a continued fall in earnings, after sales in a “challenging” 2023 were hit by high interest rates, inflation and geopolitical tensions.
Operating income at the world’s second-largest home appliances maker more than halved last year on flat sales.
Shares in Electrolux slumped 6.0%.
Meanwhile, the leading faller in the FTSE 250 is Close Brothers, down 3.6%, hit by a downgrade by RBC to ‘sector perform’ from ‘outperform.’
The broker has cut its price target to 650p from 800p.