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Ryanair, EasyJet ‘buys’ ahead of travel easing, says HSBC

Newsflow on travel reopening is likely to drive low-cost airline shares higher says HSBC, which has moved Ryanair PLC (LON:RYA) and easyJet PLC (LON:EZJ) on to its buy list.

While travel has lagged the reopening progress elsewhere, HSBC sees that changing as the EU has now agreed on the Digital COVID Certificate to facilitate movement within the EU.

The EU is also opening up to visitors from outside the EU, subject to vaccinations or testing, while the broker expects the UK also to relax restrictions though it says policy here is harder to predict.

“We think the US may soon rescind its Executive Order banning UK and EU travellers entering the US.

“We see the EU moving fast to reopen the US-EU market. This could prompt the opening of the US-UK market. Once the US is defined as a green territory under the UK traffic light system, we would see pressure to open European destinations.”

HSBC’s target price for Ryanair rises to €19 from €16.75, on easyJet to 1,200p from 1,00p and on Wizzair (LON:WIZZ), which moves up to hold, to 4,500p from 4,000p.

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