JPMorgan puts IAG on ‘positive catalyst watch’ ahead of Q1 results
International Consolidated Airlines Group SA (CDI)
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JPMorgan Cazenove placed shares of BA and Iberia owner IAG on ‘positive catalyst watch’ on Wednesday ahead of first-quarter results and following minor changes to estimates published yesterday.
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JPM noted that Q1 is seasonally the smallest quarter in terms of EBIT contribution for the network carriers, and seasonality has shifted more towards Q2-Q3 post pandemic given the strong leisure demand and lack of full corporate recovery.
"However, in our view the Q1 results could be a catalyst to spur consensus 2024E EBIT upgrades on the stock, given a more positive pricing backdrop both for Q1 and into the summer (we currently forecast passenger unit revenue growth up slightly for 2024E)," it said.
"We would not anticipate any cost offsets (excluding any unexpected disruption), with Q1 expected to be the worst quarter for ex-fuel CASK (cost of available seat kilometre) pressure, and included within the +1-2% 2024E guidance already."
JPM is forecasting 2024E EBIT of €3.7bn - no explicit guidance was given previously at the 2023 results - which is around 8% ahead of Bloomberg median consensus.
The bank has an ‘overweight’ rating on the stock and a €2.50 price target.