Airlines

Premium financials, premium prospects – where is the premium multiple?

  • Sectors : Airlines
  • Companies : IAG | Norwegian Air

Ratings and price correct at time of issue.

  • IAG

    Closing Price: 706.8p

  • RATING 31/08/18

  • PREVIOUS RATING 22/08/17

    NEUTRAL

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.

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Aug 31 2018, 06:30 IST/BST

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