European airlines, including British Airways owner International Consolidated Airlines Group PLC (LON:IAG), Ryanair Holdings PLC (LON:RYA) and easyJet PLC (LON:EZY) face a number of risks in 2019, according to Deutsche Bank.
The investment bank said risks this year, potentially include a slowing macroeconomic backdrop, weakening consumer confidence, trade wars, Brexit and oil price volatility.
“After nine years of economic expansion we are likely near the end of the cycle and absolute returns may be hard to generate,” Deutsche Bank said.
“We favour those stocks that have an element of structural growth, pricing power, flexible cost structures, robust balance sheet, visible dividends and accretive M&A. Conversely we shy away from stocks that have high operating and financial leverage and little pricing power.”
Deutsche Bank maintained a ‘buy’ rating on IAG but raised its target price to 800p from 770p.
On Ryanair, the bank kept a ‘hold’ recommendation but cut its target price to 13.2p from 13.9p.
EasyJet was also left at ‘hold’ but the target price was lifted to 1,485p from 1,440p.
Around noon, IAG shares were down 0.9% to 598p, Ryanair shares fell 1.6% to 10.14p and easyJet shares dipped 0.9% to 1,167p.