Broker snap: UBS lowers price target for IAG

7th Nov 2011 14:13

Airline IAG reported third quarter sales that missed estimates and will not provide guidance until its Investor's Day, to be held on Friday. The lack of a clear outlook led UBS analysts to lower the airline's price target to 240p from 200p, although they have opted to maintain their 'buy' recommendation in place."We now assume a smaller profit is made in Q4 [fourth quarter] and downgrade our full year 2011e ebit [earnings before interest and tax] from €546m to €476m. Given our increased caution going into 2012 we downgrade ebit from €805m to €586m," says UBS.UBS believes that IAG could face further downward pressure next year should the potential BMI deal go through due to the difficulties BMI currently faces.SB