International Consolidated Airlines Group SA (LSE:IAG) shares ticked higher on Wednesday following upbeat guidance from Iberia, the Spanish airline owned by the group, at its latest investor day.
Panmure Liberum remains bullish, reiterating its 540p price target and ‘buy’ rating, highlighting the division’s ambitious growth plans and strong profitability.
Iberia is targeting €1.4 billion in operating profit over the medium term, up from €1.0 billion in 2024, supported by an increase in its long-haul fleet from 45 to 70 aircraft.
The expansion is geared towards point-to-point traffic, typically more profitable and less exposed to fierce competition than connecting routes.
The broker noted that Iberia is benefiting from a robust Spanish economy and continued immigration from Latin America, both key demand drivers.
Importantly, a return on invested capital of 22% last year is expected to remain resilient, thanks to high aircraft utilisation, strong on-time performance and productivity gains.
Panmure argues that these fundamentals underscore IAG’s ability to generate value and maintain attractive margins—qualities it believes are not yet fully priced into the shares.
Shares in the group, which also owns British Airways, flew 1% higher to 316.2p.