EmailInternational Airlines Group, the owner of British Airways and Spain's Iberia, is flying high after a broker upgrade.
Analysts at UBS have moved from neutral to buy on hopes of a successful resolution to its plans to restructure Iberia, as well as the prospect of a recovery in the global economy. The airline, which this week unveiled a 0.3% rise in passenger traffic in December compared to a year ago, is up 4.8p at 201.7p, the biggest riser in the FTSE 100.
In its update UBS said:
Despite its share price being up over 25% in 2012, IAG was the worst performing European airline share under our coverage, underperforming Lufthansa by over 30% and Air France KLM by around 45%. We think that IAG could be the laggard most likely to outperform in 2013 should it achieve the concessions the company wants from Iberia staff.
During December we were somewhat surprised that an accord with the Spanish unions to reach an agreement on a five year labour deal was agreed and strikes called off. We think some of the Iberia restructuring risk has dissipated and, although still challenging, we are becoming more confident on positive talk results.
Despite the tough conditions in Europe with its international network, we see the company as a play on global economic recovery. Furthermore, should the fuel prices continue to be stable, and the euro continue to rise or remain stable, then we see 2013 delivering a fuel tailwind.
Topping the FTSE 250 meanwhile is Centamin, up 5.65p at 56.8p, after this week's news that its gold production for 2012 was higher than expected, despite much publicised problems with customs authorities and fuel suppliers in Egypt.
Close behind was Moneysupermarket.com. It has added 11.1p to 169.4p following news of an expected 15% increase in full year revenues to £204.5m and anticipated earnings of £66m, up 26%. Recent acquisition MoneySavingExpert.com contributed around £2.8m of adjusted earnings.
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