BABWF - International Airlines Group: Cost Execution And Volume Growth
2024-06-27 13:11:56 ET
Summary
- EU airline companies underperform in the market, but IAG is a bargain at current levels.
- IAG has a strong brand portfolio with a competitive edge, allowing the group to compete in various market segments.
- I have a positive outlook due to long-haul capacity upside, corporate travel demand, and leaner cost structure.
- There is an unjustified valuation discrepancy with peers. IAG is a buy.
Here at the Lab, we have noticed that EU airline companies continue to underperform in the market. In our coverage, we have a long-standing buy rating with low-cost operators such as Ryanair Holdings ( RYAAY ) and easyJet ( EJTTF ); however, today, we decided to initiate coverage of International Airlines Group or IAG ( OTCPK:ICAGY ) ( OTCPK:BABWF ), which is Europe's third-largest airline group and compromised a strong portfolio of well-known brands such as British Airways (BA), Iberia, LEVEL, Vueling and Irish-based Aer Lingus (Fig 1). The company was formed in January 2011, and each airline has a separate operating structure within the IAG holding. Since the pandemic outbreak, IAG's share price has been down by 70%, and we believe the company is at a bargain at the current level. ...
International Airlines Group: Cost Execution And Volume Growth