EasyJet shares stall on Kepler downgrade

(ShareCast News) - EasyJet shares stalled on Friday as Kepler Cheuvreux cut its rating on the stock to 'reduce' from 'hold' and chopped the price target to 1,450p from 1,697p.It noted the share price is currently at the same level at which it initiated coverage with a 'hold' on 3 March 2014.Since then, the company has delivered strong results and margin improvements, offset by news flow of increased competition in relevant markets."We expect revenue/seat and operating margins to start to decrease as of 2016," said Kepler, adding that EasyJet replaced Air France-KLM on its 'least preferred' sector list.Kepler said it expects revenue per seat at constant currency to fall by 3% in 2016 due to increased competition in relevant markets during the current winter flight schedule, but especially next summer."We value EasyJet based on its average historical price-to-earnings multiple over the last five years of 11.4x applied on 2016E estimates, which results in a fair value of 1,447p per share and downside of 16%."At 1453 GMT, EasyJet shares were down 2.3% to 1,674.88p.