For analysts at Liberum there were some “causes for concern” at British Airways owner IAG (LON:IAG) this morning. Although the results were in line with expectations, the unit revenue trend appears to have deteriorated from the first quarter, noted the broker.
Without the Aer Lingus acquisition, operating profit would have been lower year-on-year and Librerum said it expects consensus to slip on the clarified guidance of a lower double-digit percentage increase in operating profit.
It said that despite attractive fundamentals and a lowly valuation, uncertainty on the outlook left it cautious. Liberum’s maintained its Hold recommendation with a target price of 375p
Cantor Fitzgerald was more bearish however. It said the expected lower growth in operating profit implied consensus to cut forecasts, perhaps in the range of 5-7%.
Pearson's (LON:PSON) first half results conference call raised more questions than it answere for analysts at Liberum. Its 2016 guidance came into doubt, but highlighted another significant cash payment out for the Penguin pension plan. The risk of another profit warning for Pearson appeared relatively high, said the broker, reiterating its Sell rating.
Finncap viewed Keywords Studios (LON:KWS) recent acquisition of Canada-based Volta Creation with optimism, resulting in a price target upgrade to 334p. The analyst said the takeover enabled the business to scale up quickly without the need to maintain a high fixed cost base.
Jefferies upgraded Breedon Aggregates Ltd (LON:BREE) and was a buyer right up to 84p, up from 70p.
Deutsche Bank embarked on a spree of upgrades this morning.
The broker upped its target price for British American Tobacco (LON:BATS) from 5,000p to 5,300p indicating a 10% upside on its current share price. The broker reiterated its Buy rating.
Drinks-maker Diageo PLC (LON:DGE) also had an upgrade, Deutsche Bank boosted its target price from 1900p to 2000p showing confidence that it will deliver its growth plans.
Fast food delivery group Just Eat PLC’s (LON:JE. target price was raised by the bank from 630p to 725p.
BT Group PLC (LON:BT.A) however was immune to the broker’s optimism. Following a warning by Ofcom that the telecoms group could be split up if it didn’t get its act together with Openreach, Deutsche downgraded the target price from 410p to 390p.