RE: Credit Suisse analysts believe IAG has about four more years of cash-burn coverage so no need for RI15 Sep 2021 22:37
The first straw that broke the camel's back and forced IAG and investors to make an emergency landing has been Credit Suisse's change of mind on the company's situation. The drastic reduction of its target price, to 195 pence from 256 a just 15 days ago, has drastically reduced its prospects and its bearish streak of the last sessions in the market.
The reasons Credit Suisse argues are summed up in two. The first is a future capital increase. Let us remember the second that it would be in less than a year to regain the necessary liquidity to face losses. Especially after what just happened with Easyjet. On the 8th it was a successful year, by the way of the one carried out, with a double price and for almost 3,000 million euros. If the idea is materialized, it will mean a significant dilution for the current shareholders , who should go back to the market to avoid it.
The second is directly related to the failure of transoceanic flights between the US and the European Union. At the beginning of summer it seemed that an opening without restrictions would take place, but even now from the Old Continent they are restricted for fear of contagion. And remember that it is the most penalized by this concept.
And the second straw that broke the camel's back comes from Exane BNP Paribas which has lowered its price target to 1.99 euros per share after cutting its recommendation to neutral.
In its quotation graph we see how the value does not leave the negative dynamics, with cuts of over 7% in the last 20 sessions and a fall in September that reached 8.5% for IAG. It is the worst value of the month and has gone negative for the year, with a 4.75% cut.
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