British Airways owner International Consolidated Airlines Group SA (LSE:IAG) has netted a double upgrade from Morgan Stanley (NYSE:MS), with the bank flipping its share price rating from 'underweight' to 'overweight'.
Morgan Stanley (NYSE:MS) analysts highlighted that IAG’s capacity growth “looks increasingly supportive” to pricing in the near and medium term.
While IAG’s attractive valuation is hardly the exception in the underbid airline sector, “the path to earnings upgrades looks clearest”, said the bank.
“Supportive fare data is showing up in advertised fares in North Atlantic, while advertised data across the rest of the total network is also outperforming,” analysts added.
IAG was the best-performing stock among the FTSE 100 set on Wednesday morning, rallying 3.5% to 179p.
Alongside the double upgrade, IAG was supported by some optimistic spending data from TSB showing a 9.2% surge in airline and travel spending in the first half of 2024.