Shares in International Consolidated Airlines Group (LON:IAG) have climbed higher in today’s session, as RBC Capital moved its stance on the British Airways and Iberia parent to ‘outperform,’ following a recent slide in the stock. The move comes after earlier this week, Citigroup lifted its stance on the blue-chip group, pointing to upside risks on the horizon, which, the broker argues, at the very least will likely halt the downward trajectory in the company’s shares.
As of 13:07 GMT, IAG’s share price had added 0.79 percent to 537.20p. The stock is marginally outperforming the broader London market, with the blue-chip FTSE 100 index currently standing 0.30 percent higher at 7,172.95 points.
RBC lifts rating on IAG
RBC lifted its rating on IAG to ‘outperform’ today, with a price target of 650p on the shares. Proactive Investors quoted the analysts as commenting that the recent decline in the British Airways parent’s stock was too harsh given that there had been no change to forecasts or the uncertain UK outlook.
“In our previous note [last week], we stated we would review our share price rating if the share price fell to 500-515p,” the broker pointed out, adding that with a price within two-three percent of that level, it was upgrading following a 20-25-percent “relative under performance to Air France-KLM, Finnair, Lufthansa, and Scandinavian Airlines year-to-date”.
Potential for 1,000p
Proactive Investors further quoted RBC as commenting that it thinks that “the long-term potential for a 1,000-1,200p share has been overlooked”.
“Though only a minority (35-percent) prospect in our PT, we think that with a close to five-percent DPS yield support, investors with a view beyond H1-2019 delivery should now revisit the shares,” the broker concluded.