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Aug 31 2018, 06:30 IST/BST
Airlines
Premium financials, premium prospects – where is the premium multiple?
- Sectors : Airlines
- Companies : IAG | Norwegian Air
DAVY VIEW
IAG is not a typical airline. Its network confers competitive benefits that translate into consistent yield outperformance while simultaneously allowing unit cost reductions. It has an excellent track record as a consolidator, and its cash flow and conservative balance sheet have facilitated two sizeable buybacks so far this cycle. Looking forward, we expect more of the same and are particularly enthused about a potential Norwegian transaction. Accordingly, we upgrade our rating to ‘Outperform’ and raise our price target to £9.0, suggesting almost 30% upside.
