IAG tops FTSE 100 on UBS upgrade to 'buy'

13th Jul 2015 10:17

(ShareCast News) - International Consolidated Airlines Group rose to the top of the FTSE 100 after UBS upgraded the stock to 'buy' from 'neutral' and raised its price target to 700p from 580p.It said that since hitting a high of 617p in April, the shares have fallen nearly 20% and now represent a good entry point. The broker put emphasis on what it considers to be an attractive valuation and exposure to recovering UK, US and European markets, and said most of the heavy lifting at Iberia is done, with further benefits to come through in 2015.UBS said there is upside to forecasts given restructuring and potential further falls in the oil price and noted that this will be the first year the group pays a dividend.The bank said its Evidence Lab Travel Intentions Survey provides confidence that travel intentions as they related to the UK remain strong, while currency continues to have a positive impact."While we are concerned about short-haul capacity, the long-haul capacity situation is reassuring. Lastly, we expect earnings momentum to continue to be positive given a recovering Europe and any direct impact from Greece is minimal (less than 1% of IAG capacity)," said UBS.IAG is the parent company of British Airways and Iberia.At 09:57, shares were up 2.5% at 544.50p.