By Steve Goldstein
European aviation should be set for a multi-year recovery, say JPMorgan Cazenove analysts, as COVID-19 moves from a pandemic to an endemic.
Ryanair /zigman2/quotes/205429530/delayed IE:RYA -2.79% shares jumped 5% as JPMorgan Cazenove upgraded the airline to overweight from neutral, saying the airline will generate strong free cash flow and strong margins as end demand recovers given its ultra-low costs. British Airways owner International Airlines Group /zigman2/quotes/208070069/delayed UK:IAG -0.49% rose just 1% as JPMorgan downgraded it to neutral from overweight, warning of the need to issue equity given its net debt of around €13 billion.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.11% edged up 0.1% to 481.40, helped by gains for the travel sector as well as utilities such as Iberdrola /zigman2/quotes/202060935/delayed ES:IBE +0.89% .
Of the major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.02% gained 0.2%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.05% declined 0.2% and the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.24% declined 0.2%.
Puma /zigman2/quotes/203655455/delayed XE:PUM +0.09% shares rose 2%, after forecasting sales growth of 32% on the year, that would lead to operating income of €557 million. Puma had previously targeted sales growth of at least 25% and operating income of up to €500 million. Analysts at UBS said the results, though sparse in details, confirm “the brand’s continued exceptional momentum and the company’s agile operations, despite the supply chain issues impacting its peers.” Shares of Puma rival Adidas /zigman2/quotes/206448829/delayed XE:ADS +0.17% edged up 0.5%.