Deutsche Bank on Wednesday revised its recommendation for easyJet, raising its stance from "sell" to "hold" and boosting its target price to 540p from 340p. The shares had most recently closed at 480.20p.
Analyst Jaime Rowbotham flagged the significance of Castlelake L.P., an alternative investment manager with a focus on asset-based strategies and experience in aircraft investing, leasing and servicing. Deutsche Bank highlighted Castlelake’s current direct commercial link to easyJet through the leasing of four A320neo aircraft and noted the firm holds a 2.14% stake in the carrier.
The broker drew attention to Castlelake’s involvement in a 2023 situation with SAS. In that episode, Castlelake acquired aviation assets that Deutsche Bank described as undervalued and under cyclical pressure, before the investor later optimized and subsequently exited those holdings. Deutsche Bank presented that episode as context for why Castlelake’s interest in easyJet is noteworthy.
"Their interest in easyJet should not be taken lightly therefore," Rowbotham said.
Deutsche Bank also emphasised regulatory considerations tied to any prospective transaction. The bank said that a deal involving easyJet would probably require the participation of additional partners in order to satisfy European Union ownership and control requirements.
The comments from Deutsche Bank place a spotlight on the intersection of strategic investors, aircraft leasing relationships and regulatory constraints. The bank’s upgrade and higher price target were presented alongside the details of Castlelake’s lease arrangement and equity position, and the reminder that EU rules could shape how any transaction would need to be structured.
Contextual notes
- The upgrade moved easyJet from a sell rating to a hold rating, with the price target raised to 540p from 340p.
- Deutsche Bank singled out Castlelake’s existing commercial relationship with easyJet - a lease of four A320neo jets - and its 2.14% stake in the airline.
- Deutsche Bank referenced Castlelake’s 2023 activity involving SAS, where Castlelake bought aviation assets seen as undervalued, later optimised those assets and ultimately exited the holdings.
- The broker noted any potential transaction involving easyJet would likely need additional partners to comply with EU ownership and control requirements.