US bank JP Morgan is expecting more good numbers from British Airways owner International Consolidated Airlines Group SA (LSE:IAG) with the upcoming set of quarterly updates from the airlines sector.
The US bank sees IAG as offering the best chance of a positive surprise with transatlantic pricing strong and a benign demand/supply dynamic.
US rival Delta reported very strong Transatlantic fourth quarter revenues last week at plus 6% though the read-across is more strong US leisure/corporate demand backdrop than a direct comparison given the different customer bases and positioning.
For the European networks Lufthansa and AF-KLM, the sharp increase in jet fuel, up c10% over the past month has put share prices under some pressure year to date, bar IAG.
In the last updates, the Network carriers were 50-70% hedged for 2025 estimates on fuel, with AF-KLM the lowest %, but JP Morgan expects that hedging level to have also moved up since.
The bank has kept its share price target for IAG unchanged at €5, which gives 35% potential upside.
Shares today were down 1% at 313.6p.