Shares in International Consolidated Airlines Group (LON:IAG) have climbed higher in London this morning as the group updated investors on its long-term profit targets. The update follows the British Airways and Iberia parent’s recent third-quarter results which revealed a rise in the company’s quarterly operating profit.
As of 09:25 GMT, IAG’s share price had added 1.10 percent to 624.81p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.65 percent higher at 7,160.97 points. The group’s shares have lost about one percent of their value over the past year, as compared with about a five-percent drop in the Footsie.
IAG updates on profit goals
IAG said in a Capital Markets Day update this morning that it still continued to target 15 percent of return on invested capital for the 2019-2023 period, as well as an operating profit margin of between 12 percent and 15 percent. The group, which also owns Aer Lingus and low-cost airlines Level and Vueling, however, said that its EBITDAR target stood at approximately €7.2 billion average per annum, as compared with €6.5 billion for the 2018-2022 period.
Liberum sees group as ‘buy’
In other IAG news, Liberum reaffirmed its ‘buy’ recommendation and price target of 875p on the British Airways parent earlier this week.
“Despite continued improvements in unit revenues and non-fuel unit costs, it seems too optimistic to assume material profit growth in a high and rising fuel cost environment, at least until industry capacity growth moderates,” the broker’s analyst Gerald Khoo commented, as quoted by Citywire, adding that while “eventual adjustment by the industry through higher fares and/or slower capacity growth” was inevitable, the blue-chip group remained “well-equipped to be among the eventual winners from such an industry shake-out”.