Broker tips: IAG, BHP Billiton, AstraZeneca, GSK

(ShareCast News) - Clear skies lie ahead for the European Airlines sector going into the winter trading period, thanks to a favourable outlook for capacity growth and given the considerable fall in oil prices since August 2015, Nomura said.The global macroeconomic outlook, notably in the core UK and US markets, is also "sufficiently robust to support a bullish sector outlook", the Japanese broker said in a research note sent to clients, "despite clear current political tensions in a number of territories that could hamper demand."Analyst James Hollins said he saw no material risk of accelerated capacity expansions or yield pressures from the low price of oil on the horizon.Furthermore, since the last time he took a look at the sector, in August 2015, the forward curve for Brent had fallen by $5 per barrel, equivalent to $50 per metric tonne for jet fuel, through to 2022.Hollins therefore decided to revisit his 2016-19 assumptions for the cost of jet fuel utilising a spot rate of $600MT, instead of $650MT - although dollar strength since capped the upside from lower fuel prices.The analyst bumped up his target price for IAG to 800p from 750p - singling out as its top-pick - "following an underlying and Aer Lingus-related upward revision to estimates". BHP Billiton's decision to increase copper production in fiscal year 2016 and lower cost guidance are symptomatic of some of the factors that are ailing the wider copper mining industry, as firms add tonnes in a bid to lower their unit costs, adding to the existing oversupply, Goldman Sachs said.The miner increased its guidance for copper production in fiscal year 2016 to approximately 1.55mt from 1.5mt and projected about a 20% reduction in group costs, the broker said following the start of a copper briefing and tour of BHP's Chilean operations which started on 1 December.However, whereas cost reductions and weaker producer country currencies should see the cost curve flatten and marginal costs fall - and hence prices too - BHP Billiton in fact guided towards higher costs at Escondida for fiscal year 2016.Management now expects costs of $1.21 per pound, up from $1.18 per pound previously - despite a weaker Chilean peso.While that may just be a function of the company being conservative, it is a "slight negative", analysts Eugene King, Craig Sainsbury and Christopher Jost said in a research note sent to clients.Goldman Sachs trimmed its twelve month target price on the stock to 925p from 950p previously, while staying 'neutral' on the shares. Pharmaceutical stocks got a boost on Wednesday as Morgan Stanley double upgraded AstraZeneca to 'overweight' from 'underweight' and said it was among its top picks.The bank, which lifted AZN's target price to 5,300p from 4,300p, said it has underperformed dramatically over the past year but looks set to reap the rewards of heavy investment, at an attractive valuation."Consensus expectations have moderated on Astra's pipeline ($13bn in 2023, previously $16bn), giving the stock good pipeline optionality over the next 12-18 months, notably with phase 3 readouts for Brilinta, benralizumab and lynparza,and launches for three new drugs," it said.MS raised its price target on 'equalweight' rated GlaxoSmithKline to 1,450p from 1,350p.The bank said it reckons expectations have bottomed out after several years of continuous earnings per share downgrades, with double-digit earnings growth in full year 2016 as per management guidance.