Time To Buy Airline Stocks For A Rebound, Or Is It Too Soon? $ALGT $ICAGY $LUV https://talkmarkets.com/article/time-to-buy-airline-stocks-for-a-rebound-or-is-it-too-soon-1773186607
Morgan Stanley initiated coverage of IAG’s U.S.-listed ADRs with an Overweight rating and a $12.70 price target, implying more than 11% upside from the last close. Analysts said the view on the ADRs is fully aligned with their positive stance on the European-listed shares, citing valuation mark-to-market adjustments for FX and fuel that lifted EPS and the target price by about 4% on the underlying stock.
IAG is valued using a blended 2026 forward EV/EBITDA of 3.9x and EV/EBIT of 6.0x, around one standard deviation above the group’s 10-year median, reflecting stronger execution and an improved balance sheet. The ADR target is based on the two-ordinary-shares-per-ADR ratio and prevailing EUR/USD rates.
Morgan Stanley highlighted supportive industry dynamics, including resilient North Atlantic demand, constrained capacity growth, and limited widebody aircraft supply.
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