On Monday, JPMorgan analyst Harry Gowers increased the price target for International Consolidated Airlines Group (LON:ICAG) SA (IAG:SM) (OTC: ICAGY (OTC:ICAGY)) to GBP5.50, up from the previous GBP5.00, while reiterating an Overweight rating on the stock. Gowers highlighted IAG as the firm's top pick for 2025, citing a remarkable performance since last March, with the airline's shares climbing 140% compared to only a 5% increase for the SXXP index.
The analyst's optimism is based on the anticipation of five revenue tailwinds expected to propel higher Revenue per Available Seat Kilometer (RASK) this year than the market currently forecasts. Gowers also referenced a potential "blue sky" scenario where the value per share could reach €7, which would represent a 75% upside. This scenario is dependent on stronger pricing growth, increased share buybacks, and a further re-rating of the company.
Alongside the upbeat outlook, JPMorgan also published a First Principles primer on IAG's business to provide additional insight. The firm has adjusted its 2025E EBIT forecast upward by 6% to €4.85 billion, driven by higher pricing assumptions, positioning it approximately 8% above the company consensus. Following this analysis, the December 2026 price target for IAG has been raised by 10% to €5.50.
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