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 (DUB:IE:RYA) 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 (LON:UK:IAG) 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.
JPMorgan also reiterated an overweight on Wizz Air (LON:UK:WIZZ) , and kept easyJet (LON:UK:EZJ) at neutral.
The Stoxx Europe 600 (STOXX:XX:SXXP) edged up 0.1% to 481.40, helped by gains for the travel sector as well as utilities such as Iberdrola (MCE:ES:IBE) .
Of the major regional indexes, the German DAX (XEX:DX:DAX) gained 0.2%, the French CAC 40 (PAR:FR:PX1) declined 0.2% and the U.K. FTSE 100 (FTSE:UK:UKX) declined 0.2%.
Puma (ETR:XE:PUM) 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 (ETR:XE:ADS) edged up 0.5%.