JP Morgan has reiterated its 'overweight' recommendation on International Consolidated Airlines Group SA (LSE:IAG) after the British Airways owner posted better-than-expected second-quarter results.
The shares rallied on the back of the update, with the bank keeping its price target at €5.50 for December 2026, implying nearly 30% upside from current levels.
IAG surprised the market with stronger pricing and cost discipline, prompting JPM to raise its 2025 operating profit estimate by 3% to €5.03bn, around 5% ahead of the Bloomberg consensus.
The bank now forecasts a record 15% earnings before interest and tax margin for 2025, noting, “IAG’s outlook commentary points to lower second-half pricing; however, this should be offset by lower costs.”
The American bank expects further news on shareholder returns at the third-quarter update, including a possible increase in the dividend payout and the launch of a new share buyback programme.
With robust transatlantic and European short-haul demand and continued cost discipline, JP Morgan says IAG remains one of its top picks on the Analyst Focus List.
IAG shares rose 1% to 381p.