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Shares in IAG could be worth 350p - Liberum
British Airways owner, International Consolidated Airlines Group (LON:ICAG) SA could be worth as much as 350p per share, according to analysts at Liberum.
That is more than double the 152p price that shares are fetching today in London after a further 1.5% rise today.
In a note following the airline’s first quarter results on Friday, Liberum's Gerald Khoo said a more favourable fuel cost outlook and resilient demand will drive material upgrades to short-term estimates.
He has updated his fuel price assumptions to reflect the sharp fall and now assumes $750/tonne for the unhedged portion of the fuel bill (vs. $900/tonne previously).
He explained supply chain bottlenecks constrain the industry’s ability to add excess capacity, “underpinning both strong unit revenue trends and our optimism on the outlook.”
“We consider IAG’s rating to not reflect its undiminished strategic positioning,” Khoo commented.
As a result, he raised his price target to 350p per share from 240p and reiterated a buy rating.
FSB wants businesses to be allowed to renegotiate fixed price deals
The Federation of Small Business has caled on energy suppliers to allow firms locked into fixed price contracts to be able to renegotiate terms to stop further business failures.
Research by the business lobbying organisation showed more than one in ten (13%) small firms fixed their energy contracts during market peak and that 93,000 small firms now say they could be forced to close, downsize or radically restructure their businesses.
"Energy suppliers should give small firms the option to “blend and extend” their fixed energy contracts, renegotiating and signing up for longer," the FSB said.
It warned hundreds of thousands of small businesses are trapped in contracts that mean their latest bills are at last summer's peak market rate for energy - even though wholesale prices have fallen since last winter.
This comes a month after massive cuts to government support on energy bills for businesses.
"The downscaled government support means small firms that signed up to fixed tariffs in 2022 will see their bills revert back to last year’s peak levels," the FSB commented.
A significant proportion of small firms stuck in fixed contracts are from the accommodation and food sector (28%), and the wholesale and retail sector (20%).
Four in ten (42%) small firms that fixed energy contracts in the second half of last year say it has been impossible for them to pass on costs to consumers who had to tighten spending and can’t afford further price increases amid the cost of living crisis.
FSB Policy Chair Tina McKenzie said: “There are signs that small businesses may be about to turn a corner after last year’s downturn. Giving small firms a way out of last year’s market peak rates will accelerate the progress to recovery.”
Meanwhile, the FTSE 100 has stabilised around the 7,750 mark, down 28 points.
Retail sale rise 5.1% in April, according to BRC
UK total retail sales increased by 5.1% in April compared to a decline of 0.3% in April 2022, according to figures from the British Retail Consortium.
This is in line with the 3-month average growth of 5.1% and above the 12-month average growth of 3.0%, the BRC said.
On a like-for-like basis retail sales increased by 5.2% in April, against a decline of 1.7% in April 2022.
Food sales increased 9.8% on a total basis and 10.0% on a like-for-like basis over the three months to April, above the 12-month total average growth of 6.3%.
Non-food sales increased 1.2% on a total basis and 0.8% on a like-for-like basis over the three-months to April. This is above the 12-month Total average growth of 0.2%. For the month of April, Non-Food was in growth year-on-year.
Over the three months to April, in-store non-food sales increased 3.9% on a total basis and 3.3% on a like-for-like basis since April 2022.
Online non-food sales decreased by 3.6% in April, against a decline of 13.9% in April 2022, steeper than the 3-month average decline of 2.9%.
Helen Dickinson OBE, Chief Executive of the BRC said: "While retail sales grew in April, overall inflation meant volumes were down for both food and non-food as customers continued to adjust spending habits."
"Clothing sales underperformed as the poor weather left customers thinking twice before decking out their summer wardrobe."
“Retailers hope sales will improve over the warmer summer months, especially as consumer confidence stabilises and inflation begins to ease," she added.
Myron Jobson at interactive investor noted while retail sales experienced robust growth last month, "a closer look at the data reveals it’s not all as it seems."
Jobson explained that volumes for both food and non-food were down last month "as the ongoing cost of living squeeze on budgets continue to force many Britons to adjust their spending habits."
"Baskets are getting smaller and more of us are ditching premium brands for cheaper alternatives, while many are reducing spend on nice-to-have’ items," he added.