Deutsche Bank says IAG set to re-rate versus peers, reiterates 'buy'

It did have higher operational and financial gearing in comparison to those two rivals.

Yet according to the investment bank, it was also a "better quality" business and was just as exposed to the same positive demand and supply dynamics.

In particular, Deutsche Bank said, the outlook for the second half was now more "uncertain", but not for IAG.

On a related note, analysts at Deutsche pointed to the positive second quarter update from Delta, with the US carrier having touted how UK had been a "bright spot" with strength expected to be sustained through the summer.

United Continental had also reported a better than forecast performance in the Atlantic region.

Vueling was "lapping" weak comparables and capacity growth, Deutsche added, and capacity growth in the third quarter would be "muted", to the benefit of pricing.

By way of comparison, the broker pointed out how IAG's shares had de-rated by 23% versus those of Air-France KLM and by 8% against Lufthansa's.

At 24% year-to-date, earnings upgrades from analysts had also been running well below those for its peers, with Air France having seen an 80% increase and Lufthansa 38%.

"We think both of these gaps will close."

The shares also looked attractive in terms of their EPS and EV/EBITDAR multiples of 6.7 and 4.3, respectively.