IAG share price soars as analysts point to strong market position

on Dec 13, 2016
Updated: Oct 21, 2019

Shares in British Airways parent International Consolidated Airlines Group (LON:IAG) have jumped more than two percent in London in today’s session, outperforming the broader market, with Panmure starting coverage of the stock with a ‘neutral’ rating. The analysts have pointed to the company’s strong market position even if they remain cautious on demand at home.

As of 14:14 GMT, IAG’s share price had gained 2.66 percent to 444.00p, outperforming the blue-chip FTSE 100 index which is currently 0.65 percent better off at 6,935.20 points. The group’s shares have lost more than 27 percent of their value over the past year, as compared with an over 11-percent rise in the Footsie.
Panmure began coverage of IAG today, rating the company as a ‘hold’, with a price target of 450p on the stock. The analysts note that the blue-chip group, which also owns Iberia, Aer Lingus and Spanish low-cost carrier Vueling, “probably merits core holding status in this space given strong market positions and management track record”.

“We are cautious on UK demand, and our flattish 2017 profit forecast, although free cash flow of 12 percent is attractive,” the analysts pointed out, as quoted by the Guardian. “We are wary of cost saving and shareholder return expectations running high whilst the new BA Captain [Alex Cruz] has it all to prove.”
The comments come after IAG recently updated investors on its November performance, revealing that its traffic, measured in revenue passenger kilometres, had increased by 3.2 percent year-on-year last month. The company’s premium traffic meanwhile surged 4.4 percent, while group capacity measured in available seat kilometres climbed by 3.7 percent.
Numis Securities reiterated its ‘buy’ rating on the FTSE 100 group yesterday, valuing the shares at 344p, while Peel Hunt placed IAG under review.
As of 14:55 GMT, Tuesday, 13 December, International Consolidated Airlines Grp share price is 445.20p.

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