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23 Feb, 2021 17:06

BofA adds IAG to Europe 1 list on prospects for recovery in travel

ep filed - 04 may 2020 england gatwick british airways
FILED - 04 May 2020, England, Gatwick: British AirwaysGareth Fuller/PA Wire/dpa - Archivo

Analysts at Bank of America added stock in IAG to their Europe 1 and Small and Medium Capitalisation best ideas lists on the back of the "successful" vaccine rollouts in the US and UK.

Not least, they argued that the coming revival in travel should reduce concerns regarding further capital hikes.

"Our economists on both sides of the pond expect continued easing of restrictions in the coming months, which bodes well for travel between the two countries," they said in a research note sent to clients.

"We believe the market will increasingly look beyond near term COVID risks to the recovery. An imminent travel revival should alleviate concerns about further capital raising."

The carrier's sales for over the next 12 months were seen at half their 2019 levels, improving from 20% of their comparable year ago level in the first quarter to approximately 70% by the back half of 2021.

In 2022 meanwhile, sales were expected to recover to 80% of their pre-crisis level.

"IAG appears well placed to gain share on the Transatlantic routes, given capacity cuts from competitors and its planned acquisition of Air Europa.

"While we expect a slower recovery in corporate travel, IAG has the lowest exposure of the FSCs (full service carriers) with corporate representing less than 33% of pre-crisis revenues."


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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.