ABN Amro Holding has downgraded its share price target for Ryanair from €4.70 to to €2.80 and adjusted its “buy” recommendation to “hold”.
It has also cuts its forecast for EasyJet citing record oil prices, slowing traffic and weakening consumer confidence.
"We are not surprised that many investors would not want to touch airlines with a bargepole," ABN analysts including London- based Andrew Lobbenberg wrote in a research note.
Citigroup also cut its price target on Ryanair, from €4.40 to €3.80, but it maintains a buy stance.
"Our core strategy for investing in airlines is to buy into the sector when things are at their grimmest, to sell when times are good," said Lobbenberg. "We are getting closer, but will not be at that point until the revenue outlook weakens."
European airlines have been contending with higher fuel prices amid slowing economies and a global tightening of credit spurred by the subprime mortgage meltdown in the US.
Oil reached a record $119.90 a barrel on April 22nd, leading ABN to upgrade its forecast to $110 from $90 a barrel.
At 10.30am Ryanair shares were trading ahead 4.7 per cent at €2.74.
Agencies