European Airlines have had a strong week, with EasyJet shares up over 5% as well as Wizz Air’s share price jumping over 3%. But recent analyst ratings from Morgan Stanley have caught the eye of investors.

Morgan Stanley has upgraded easyJet to Overweight from Equal Weight, raising its price target to 670 GBp from 600 GBp.

The investment bank believes that easyJet is well-positioned to benefit from the recovery of the airline industry, and that its low leverage and attractive valuation make it a compelling investment opportunity.

However, Morgan Stanley downgraded Wizz Air to Equal Weight from Overweight, reflecting concerns over persistent challenges facing the airline.

Connor Dwyer set a price target of 2,400 GBp, down from 3,700 GBp as he highlighted the likelihood of Wizz Air’s challenges extending into fiscal 2026, potentially impacting its growth trajectory.

He noted that slowing capacity growth is expected to improve Ryanair and easyJet’s pricing outlook for summer 2024, further complicating Wizz Air’s competitive landscape.

By James Fyeman