Credit Suisse hails IAG target for operating margins, keeps at 'outperform'

International Consolidated Airlines Group SA (CDI)

244.60p

16:40 18/11/24

1.12%

2.70p

Analysts at Credit Suisse reiterated their 'outperform' recommendation and 228.0 target price on shares of IAG, hailing management's target of returning to an operating margin of 10-15%.

FTSE 100

8,109.32

16:35 18/11/24

n/a

FTSE 350

4,473.50

17:09 18/11/24

n/a

FTSE All-Share

4,431.13

16:49 18/11/24

n/a

Travel & Leisure

8,661.05

17:09 18/11/24

0.17%

14.91

Further clarity around the "building blocks" for returning to that level would eventually advance the investment case, they said in a research note dated 7 May but published on 10 May.

As well, their expectation was that cost-cutting, premium leisure growth and tight capex management could "ensure" attractive free cash flow generation - potentially for as soon as 2022.

"We think a renewed flow of forward bookings could meaningfully alter perception around leverage," they added.

Nevertheless, their €2.3bn estimate for the carrier's operating loss in 2021 was worse than the -€1.7bn which the consensus had penciled-in.

The analysts also noted how investors hopes for a UK-US travel bubble had been dashed just the day before the research note had been written up.