Market Report: EasyJet rises above industry turbulence

Fears that budget airlines were feeling the squeeze were pushed aside yesterday as an army of analysts declared EasyJet worth a buy.

Its shares were down about 30 per cent in the past three months and recent profit warnings issued by Lufthansa and Air France gave rise to concerns of industry turbulence.

Tony Cross, a market analyst at Trustnet Direct, said: “The budget airline has been beaten back of late by questions regarding over-capacity of its long-haul rivals, leaving the shares by many accounts somewhat undervalued – both Numis and Goldman have now set a target price on the shares of around 60 per cent higher.”

EasyJet, ahead of its third-quarter update next week, shot up 80p to 1,357p yesterday.

Remaining on the flying theme, rumours emerged from the Farnborough International Airshow that aerospace engineer Meggitt could be a bid target from a US suitor. The engineer took top spot on the Footsie – up nearly 10 per cent or 46.9p to 537p.

The wider market was flying high with renewed optimism and miners rose on positive growth data from China, with Rio Tinto up 90p to 3,334.5p.

The FTSE 100 climbed 74.22 points to 6,784.67.

A 16 per cent revenue rise at Speedy Hire, thanks to the construction boom, drove shares in the small-cap fleet and equipment rental firm up 3p to 56p.

Technology tools-maker Oxford Instruments added 44p to 1,245p as first-quarter orders exceeded those of a year earlier.

Office space group Workspace said its rent roll was up 4.6 per cent in the last quarter and it advanced 4p to 594.5p.

Aim-listed carpet maker Victoria tumbled nearly 60 per cent – down 275p to 187.5p – after it paid out a special dividend of 292p a share. Executive chairman Geoff Wilding subscribed for up to 50 per cent of the enlarged share capital as part of an incentive package; he agreed to return around £21m to shareholders by May 2015.

APC Technology Group warned sales and profit will be below expectations. It has won a contract for fridge lights but failed to glow and fell 4p to 334.5p.