IAG - A restructured IAG but no longer oversold

Davy Research
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IAG has total pro-forma liquidity of €10.3bn. For Q1 2021, capacity plans are around 20% of 2019 with a cash operating cost of €185m per week (from €410m back in Q1 2020). As the CEO states “we know there is pent-up demand for travel and people want to fly”. A restructured IAG looks set to reap rewards once flying in scale resumes. The main issue now as it gets back towards 2019 EBITDA levels (we assume c.2023) is what remains to be priced in. We retain our ‘Neutral’ rating with a £2.10 price target.