RBC Capital upgrades IAG to 'outperform'

(Sharecast News) - RBC Capital Markets upgraded BA and Iberia owner IAG on Thursday to 'outperform' from 'sector perform' and lifted the price target to 220p from 200p. The bank said IAG has consistently delivered, and since it relaunched coverage of the stock last June, it has increased its IAG 2025 earnings per share estimate by almost 60%, while the share price has risen only 3%.

"IAG now generate the second highest margins (behind Ryanair), but by some metrics trade on the cheapest valuation in our airline coverage," it noted.

"Airline capacity data now suggests the North Atlantic capacity is set to be more of a tailwind rather than a headwind for IAG's BA and Aer Lingus this summer," RBC said, adding that it sees upside to consensus expectations in 2024.

At 0905 GMT, the shares were up 2.2% at 165.60p.