IAG: UBS no longer a buyer

(CercleFinance.com) - This morning UBS downgraded its buy rating on the International Airlines Group (IAG) share, adopting a more cautious stance.


Alongside this downgrade, the broker has cut its 12-month target price from 780 pence to 705 pence.

According to a report, IAG will face a number of headwinds by the end of 20018, which will continue into 2019: the increase in kerosene prices, in the wake of that of crude oil, as well as the rise in capacity in the (air transport) sector, which could weigh on aircraft occupancy rates, as well as a potential deterioration in the yields of North Atlantic routes.

In addition, for the Spanish-British company IAG, the year 2019 will also be marked by the finalization of Brexit. In short, UBS now expects the group's 2019 operating profit to fall short of its level in 2018. If it does occur, this decline would be a first since IAG's creation via the merger between British Airways and Iberia.



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