Barclays upgrades Easyjet after strong first quarter

Easyjet's shares were flying higher on Thursday after analysts at Barclays Capital upgraded their stance on the stock from 'equalweight' to 'overweight' and hiked their target price from 1,850p to 2,150p.The positive move came after the airline's stronger first-quarter update on Tuesday which showed "conclusive evidence that Easyjet has developed one of the best low cost carrier business models in Europe", Barclays said."The company has proven our capacity concerns unfounded, growing pricing despite a fierce competitive environment, which could now improve into the summer (despite lower oil)," the bank said."We think UK demand will remain strong and expect self-help to support fares through the second half."Easyjet is guiding to a 2% increase in revenue per seat (RPS) in the first half, better than previous guidance.Barclays analysts, however, estimate a 1.5% decline in RPS in the second half but reckons that the company has the potential to "do better". Their "blue-sky scenario" estimates 15% earnings per share upside potential."Valuation is attractive, in our view, and on a relative basis, shares have underperformed the recent sector rally," Barclays said.The stock was up 4.7% at 1,850p by 12:39.