EasyJet (LON: EZJ) shares were down slightly on Wednesday, but analysts are becoming increasingly more positive on the stock following its Q1 update on Tuesday.

The low-cost carrier said this week that it expects to exceed FY23 profit expectations and that it has seen strong demand, which is continuing into the summer. EasyJet shares jumped in the immediate aftermath of the report, however, they have given up those gains and fell around 0.2% Wednesday.

Following the Q1 update, Stifel analyst Johannes Braun upgraded easyJet to Hold from Sell with a 550p price target.

He told investors in a note that the European aviation ecosystem is still experiencing severe structural bottlenecks, which “should be a boon for sector profits.”

Braun, who also upgraded other European airlines such as TUI, Ryanair, Lufthansa, and Air France-KLM for similar reasons, added that capacity discipline, strong travel demand, and elevated pricing will make the high profits sustainable.

Elsewhere on Wednesday, easyJet was lifted to Neutral from Underperform at Oddo BHF with a 560p price target. Furthermore, the airline’s price target was raised to 545p from 535p at Morgan Stanley, and to 610p from 580p at Deutsche Bank

Morgan Stanley maintained an Equal Weight rating on the stock, while Deutsche Bank reiterated a Buy rating.

By Sam Boughedda