As markets continue to tumble on economic woes, US tax inversion news as well as air strikes in Syria, there are some outperformers.
Mining shares continue to be among the few risers, with Fresnillo up 13.5p at 773.5p and Randgold Resources rising 61p to £43.26.
Overall the FTSE 100 is now down 89.52 points at 6684.11, or 1.3%.
Dipping lower but outperforming is easyJet, down 9p at £12.95. The sector has been supported by news that the European Court of Justice had cleared budget airlines to top up low ticket prices with extra baggage and seating charges.
In addition, a couple of brokers issued positive notes on easyJet. Robin Byde at Cantor Fitzgerald said:
EasyJet is trading well but the stock was weak through the summer along with the rest of the sector. We think this presents a good opportunity and upgrade to buy from hold.
Our target price is lifted to 1,600p from 1,500p. Management provided a useful strategy update at its Capital Markets Day last week. EasyJet will purchase extra A320s for expansion, target more business flyers and lift dividends payments. Meanwhile, the Flag Carriers continue to struggle to cut costs and revamp their own short-haul operations. We think easyJet and Ryanair will continue to take significant market share. We also calculate that easyJet can pay another special dividend, early in 2015. It is trading on a modest premium (8%) to the European sector, but at a 37% discount to its own historic PE.
Meanwhile Credit Suisse said the business could benefit from industrial unrest at Air France:
Air France's strikes driving market share to easyJet, suggesting a strong end to 2014: Air France KLM's confirmation that the past seven days of strike action have cost it up to €20m per day, before customer compensation and gradual operational recovery, highlights short-term earnings risk. However, we deem the bigger threat from industrial action at Air France to be that it drives incrementally more market share to easyJet. We expect easyJet to have prospered in France over the past week (around 15% of its business), supporting our view that easyJet can achieve the top end of its £540m-£570m 2014 pretax profit guidance range and we suspect that ongoing industrial challenges will be helpful to its ambition of increasing both business and leisure market share in France. We reiterate our outperform rating, with our target price of 1,837p suggesting 41% upside potential before a 3% dividend yield based on the new 40% payout ratio.
