Broker snap: UBS, Nomura lift target prices for IAG

18th Nov 2013 10:17

IAG's share price received a little boost on Monday morning as analysts at both UBS and Nomura raised their target prices for the stock following Friday's upgrade to 2015 guidance.At an investor day, the airline group said it is now targeting a €1.8bn operating profit in 2015, up 12.5% from its previous €1.6bn forecast, helped by improving margins at British Airways (BA) and the ongoing recovery of Spanish airline Iberia. The company said that the positive impact from the integration of Spanish carrier Vueling, acquired earlier this year, was also a factor behind the more positive outlook.Analyst Jarrod Castle from UBS said that the overall tone of the day was "positive" with BA continuing to be the main growth drivers. "Clearly Iberia remains the greatest turnaround story for the group but we think it is now well on track," he said.Castle has actually pencilled in an operating profit of €2bn for 2015, ahead of company guidance, with margins at Iberia expected to be higher than IAG predicts."Although the shares are up nearly 100% year to date we think there remains material upside should the current operational trajectory be maintained," he said. The target price has been lifted from 365p to 475, while a 'buy' rating has been kept.Similarly, Nomura highlighted its confidence in the 2015 profit targets, saying: "We were left with an impression that upside remains in a number of areas, particularly Iberia, that could point to a higher [...] number."The broker upped its target from 335p to 380p and maintained its 'buy' recommendation.The stock was up 1.71% at 368.4p by 10:16.BC