Broker tips: IAG, easyJet, AZ Electronic Materials

10th Apr 2013 10:38

Credit Suisse has reiterated its 'outperform' rating and 295p target price for British Airways and Iberia owner IAG after Vueling's board recommended its 9.25 euros-per-share offer."Following recent restructuring progress with Iberia staff, the acquisition of Barcelona-based Vueling would represent another significant positive step towards driving profitability in Spain," said analyst Neil Glynn.The share price of budget airline easyJet received a boost on Wednesday by Citigroup which upgraded its rating for the stock, saying that it expects strong profit growth and continued market-share gains this year.Citi has lifted its recommendation from 'neutral' to 'buy' and hiked its price target from 1,022p to 1,210p. The broker said that the new target price is based on a price-to-earnings multiple of 14, up from 12 previously, to reflect the recent market re-rating.The initial share-price reaction to AZ Electronic Material's profit warning on Tuesday was overdone, according to UBS which upgraded the firm from 'neutral' to 'buy', saying that the investment case remains intact.AZ continues to have a "robust pipeline" of new products and remains the leader - despite increase competition - in many of its markets, the broker said. Furthermore, the stock's valuation is now "strongly supportive", with shares trading at 10.6 times 2014 earnings, a discount to the 14.6 sector-average multiple.BC