Jefferies expects IAG to soothe investors' nerves with H1 update

11th Jul 2014 12:44

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."Jefferies said that investors are "understandably" concerned that IAG will not be immune to the pricing pressures at Air France-KLM and Deutsche Lufthansa, which both warned on profits in recent weeks.While not a given, a solid update from IAG is "deliverable", the broker said ahead of the company's scheduled first-half report on August 1st.Jefferies trimmed its target price on the stock from 510p to 480p but kept a 'buy' rating, saying: "We only make modest cuts to forecasts which, if right, makes the de-rating incongruous. IAG's positioning is structurally more defensible and we believe investors will be rewarded in time."The stock was 0.5% higher at 333.5p by 12:41.BC