MARKET REPORT: Shares in British Airways ‘to maintain gaining altitude’

British Airways owner IAG has seen its share price go on a journey this year, almost doubling in value, and Deutsche Bank thinks that journey has only just begun.

The German bank’s analysts said capacity constraints on transatlantic flights should leave IAG able to lift prices into 2025. 

This, they said, is supported by early evidence from the bank’s fares tracker and underpinned by the macro-outlook for the US, the UK and Spain.

The analysts see scope for another year of above-consensus earnings growth in 2025. 

As a result, they lifted their rating to ‘buy’ from ‘hold’ and hiked their price target to 400p, propelling IAG up 2.1 per cent, or 6p, to 288p.

After benign US inflation data opened the way for a final round of rate cuts in 2025, the FTSE 100 closed 0.26 per cent, or 21.26 points, higher at 8301.62, while the FTSE 250 was virtually flat – down 0.49 points, to 20,973.45.

On the rise: Shares in British Airways owner IAG have almost doubled in value this year and are now tipped to climb even higher

Among other blue-chip gainers, British American Tobacco added 1 per cent, or 39p, to 2999p after reaffirming full-year guidance for 2024, helped by a stronger second half driven by investments in its US operations and innovation in its new categories portfolio.

Consumer goods giant Reckitt Benckiser rose 2.8 per cent, or 132p, to 4835p after an upgrade to ‘buy’ from ‘hold’ from analysts at HSBC who noted it trades at a material discount to its peers and raised their target price to 5500p.

And Endeavour Mining took on 5.9 per cent, or 89p, to 1589p as it revealed a definitive feasibility study on a gold project in Cote d’Ivoire after a preliminary assessment met strategic targets. 

On the downside, equipment hire firm Ashtead Group slipped 1.7 per cent, or 92p, to 5300p after sliding 14 per cent following a guidance cut in the previous session.

IT firm Kainos rose 4.5 per cent, or 36p, to 839p after reappointing Brendan Mooney as chief executive, just over a year after he stepped down. Mooney replaces Russell Sloan.

And SSP firmed 2.5 per cent, or 4.7p, to 191.5p after the Upper Crust owner announced plans for an IPO in the spring of its Indian joint venture, Travel Food Services. 

Among the small caps, Sound Energy surged 53.9 per cent, or 0.35p, higher to 1p as the developer of gas projects completed the part-divestment of its Moroccan assets for up to £35.4million.

Victoria gained 6.6 per cent, or 3,8p, to 61.8p, adding to a leap in the previous session made after the carpet firm’s chief executive bought 200,000 shares and Morgan Stanley hiked its stake to 12.5 per cent.

Fintech firm Equals Group added 12.1 per cent, or 14.5p, to 134.5p after agreeing to a £283million takeover by Alakazam Holdings.

And Billington rose 13.3 per cent, or 56p, to 476p after the structural steel group said it expects its full-year pre-tax profit to exceed current market expectations.

But Versarien shed 16.9 per cent, or 0.01p, to 0.03p, having gained almost 23 per cent in two sessions this week after it announced a distribution deal for a biosensor chip product in the UK and Europe.

Stock Watch – ProCook

ProCook fell 5.7 per cent, or 2.1p, to 35p after the kitchenware retailer flagged a slow start to its key third quarter.

The firm blamed fewer shoppers ahead of the Budget, though numbers have improved since.

Its reported losses were up in the half-year to October 13 and, although like-for-like retail revenue rose 4.2 per cent, for the following eight weeks they were down 4 per cent. 

In the first eight weeks of the third quarter, revenue rose 0.9 per cent like-for-like.