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