Citi Research upgraded EasyJet to "buy" from "neutral," citing a profit lift expected from the airline's fleet renewal program. The broker raised its target price to 600p from 490p, implying a 27.4% total return including dividend yield. Analysts noted EasyJet trades at an "undemanding" valuation relative to sector peers.

Despite strong growth in the Holidays division, EasyJet's airline margins have been pressured by cost inflation, with profit before tax margin forecast at 3.8% for FY26, down 1 percentage point year over year. Citi expects consensus estimates to fall about 5% for the year, but sees the stock's negative investor positioning as already pricing in a weak summer.

Citi anticipates the focus will shift to FY27 as EasyJet begins benefiting from its fleet rejuvenation program, with most gains expected 24 months after September 2026. The analysts project a 16% PBT CAGR for FY26-28, about 6% above consensus, and see EasyJet offering the second-highest expected three-year EBIT CAGR in their coverage at 18% for FY26-29.