Broker tips: IAG, Burberry, Imperial Tobacco

11th Jul 2014 12:45

Upcoming results from British Airways owner International Consolidated Airlines Group (IAG) could help repair fragile sentiment in the European airline industry, according to Jefferies following recent negative newsflow which has hampered stocks."Fallout from recent profit warnings has made airline investing more precarious. But we see selective opportunities in the aftermath," the broker said in a research report. "The market is worried about IAG which, while not immune, could deliver the interims update needed to soothe investor nerves."Deutsche Bank has repeated its 'hold' stance on luxury brand Burberry after worsening currency headwinds "took the shine off" a first-quarter update, which showed strong sales momentum.Deutsche Bank said it now sees "limited upside" to its target price of 1,550p, with the stock trading at 18.5 times calendar-year 2015 estimated earnings, a small premium to the European luxury sector. Oriel Securities has maintained a 'buy' rating for Imperial Tobacco after the cigarette and tobacco manufacturer confirmed rumours that it is in talks with Reynolds American and Lorillard about the possible acquisition of certain assets or brands.He said that given Imperial is acting as a facilitator for a potential merger of the two US companies, the possible purchase of assets by Imperial "could benefit the company by doing so on favourable terms".BC