International Consolidated Airlines (IAG – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Jaina Mistry from Jefferies maintained a Buy rating on the stock and has a £3.50 price target.
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Jaina Mistry’s rating is based on the impressive financial performance of International Consolidated Airlines, particularly in the fourth quarter where the EBIT exceeded expectations by approximately 30%. Although the net profit was slightly below consensus due to a higher tax rate, this was influenced by one-off factors that may not persist in the future. The guidance for 2025 suggests a potential increase in EBIT to €4.6 billion, which reflects the strong performance in FY24 while accounting for anticipated currency cost challenges and adjusted capacity guidance.
Moreover, the company has demonstrated robust cash generation and announced a significant share buyback program of €1 billion, which is substantially higher than the consensus estimate. This move is expected to provide a positive impact on earnings per share. Additionally, the company’s margins have surpassed pre-Covid levels and are poised to grow further as long-haul capacity improves and internal efficiency measures take effect. The solid balance sheet also provides the company with the flexibility to expand its brand portfolio or enhance dividend payouts, adding to the attractiveness of the stock.
According to TipRanks, Mistry is a 3-star analyst with an average return of 5.1% and a 49.44% success rate.