British Airways-owner International Consolidated Airlines Group SA (LSE:IAG) faced a cautious review by Liberum analysts, in spite of last week’s strong third-quarter results.
Although the BA owner had hailed a record third quarter, in which profit jumped 43% on recovering demand, Liberum noted uncertainty remained.
Less hedging on fuel and the company’s ability to mitigate future effects of the increasingly skewed macroeconomic sphere had analysts mulling over the results.
“Passenger revenue trends remain strong, but unit revenue improvements are moderating,” the bank said in a note.
Profit margins could take a hit as a result, Liberum continued, anticipating that unit revenues would stay flat next year, following a 2.2% jump in the third quarter.
Questions remain over capacity growth too, the bank added, given ongoing supply issues from the likes of The Boeing Company (NYSE:BA) and Airbus Group (EPA:AIR).
“We expect similar from the industry as a whole, with aircraft delivery delays, slow aircraft production rates, maintenance delays and spare parts shortages providing clear constraints.”
Though Liberum continued to back the stock, analysts cut IAG’s share price target from 420p to 410p, alongside anticipating slower earnings per share growth in the coming years.