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JPMorgan raises Aegean Airlines target to €8

EditorLina Guerrero
Published 05/16/2024, 02:41 PM

On Thursday, JPMorgan updated its outlook on Aegean Airlines SA (AEGN:GA), increasing the price target to €8 from the previous €7 while maintaining an Overweight rating on the stock. The revision follows the airline's first-quarter results for 2024, which prompted a slight adjustment to operating result forecasts for the period of 2024-2026, primarily due to foreign exchange considerations.

The firm has also incorporated an additional €200 million share buyback into its 2024 estimates, which leaves the earnings per share (EPS) forecast for 2024 unchanged. However, the EPS forecast for 2025 and 2026 is approximately 1% higher than previously projected. Minor changes were also made to operational capital generation estimates, with the expectation that Aegean will surpass its guidance.

JPMorgan's forecasts for Aegean's operating results are roughly 3% higher than the consensus for 2025 and 2026, although they align with the consensus for 2024. The analyst cites Aegean's low valuation, which is less than 6 times its projected 2025 earnings, a discount compared to its Benelux peers and the overall sector, as a key factor in the positive assessment.

The firm's outlook is bolstered by the potential for robust capital returns in the coming years and the possibility of favorable developments in the growth and restructuring of the company's U.S. life operations. The price target increase is also justified by a revised cost of equity assumption, reduced from approximately 15% to around 13%, which the analyst believes was previously too high.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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