Credit Suisse cuts IAG price target to reflect rights issue risk
By Michele Maatouk
Date: Friday 10 Sep 2021
(Sharecast News) - Credit Suisse cut its price target on shares of British Airways and Iberia parent IAG on Friday to 195p from 256p to reflect the increasing risk of a rights issue.
"We think it is getting increasingly likely IAG looks to raise equity, and while we do not change our forecasts in this note (which are each €0.5bn below Bloomberg consensus EBIT in 2021-2022E), we reflect the risk of shareholder dilution in our target price."
The bank said it is conscious that until the transatlantic market re-opens unfettered, the IAG investment case will remain challenging.
However, it retained its 'outperform' rating on the stock, saying it continues to see it as one of the best ways to play ultimate air travel recovery across the value chain, alongside names such as Ryanair, Wizz Air, Airbus and Aena.
At 1335 BST, the shares were down 3.8% at 145.74p.
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