Report
EUR 200.00
For Business Accounts Only
The recent CMD has demonstrated that: (i) IAG has taken a more cautious position (+6% CAGR’18/22e in ASK vs. +3.4% previously) and (ii) that it will continue to generate a lot of cash (€ 2.1 Bn on average in 2019/22 pre-shareholder remuneration IAG(e), vs. ~ € 1.35 Bn BS(e); ~7% yield). With the guidelines unveiled, we cut our estimates (-6% EBIT’19/22), offset by the rollover’20, and keep our T.P. unchanged at € 8.00/sh. We recommend BUY, as we believe the company is undervalued (+25% upside) in a less cyclical sector thanks to concentration, where we also see room for an improvement in shareholder remuneration (the yield could rise from 4.7% currently to ~9% without jeopardising its solvency; 1.3x ND/EBITDA’19e) and inorganic growth.
IAG: CASH HAWK (ANÃLISIS BANCO SABADELL)
Strong cash generation is the key. BUY.The recent CMD has demonstrated that: (i) IAG has taken a more cautious position (+6% CAGR’18/22e in ASK vs. +3.4% previously) and (ii) that it will continue to generate a lot of cash (€ 2.1 Bn on average in 2019/22 pre-shareholder remuneration IAG(e), vs. ~ € 1.35 Bn BS(e); ~7% yield). With the guidelines unveiled, we cut our estimates (-6% EBIT’19/22), offset by the rollover’20, and keep our T.P. unchanged at € 8.00/sh. We recommend BUY, as we believe the company is undervalued (+25% upside) in a less cyclical sector thanks to concentration, where we also see room for an improvement in shareholder remuneration (the yield could rise from 4.7% currently to ~9% without jeopardising its solvency; 1.3x ND/EBITDA’19e) and inorganic growth.
Underlying
International Consolidated Airlines Group SA
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
Provider
Sabadell
Francisco Rodriguez
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