MARKET REPORT: British Airways shares ‘will continue to gain height’

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

Analysts at the German bank said capacity constraints on transatlantic flights should allow IAG to raise prices until 2025.

This, they said, is supported by initial evidence from the bank’s fee tracker and supported by the macroeconomic outlook for the US, UK and Spain.

Analysts see room for another year of above-consensus earnings growth in 2025.

As a result, they upgraded their rating to “buy” from “hold” and increased their price target to 400p, sending IAG up 2.1 per cent, or 6p, to 288p.

After benign US inflation data paved the way for a final round of rate cuts in 2025, the FTSE 100 closed up 0.26 per cent, or 21.26 points, at 8,301, 62, while the FTSE 250 remained virtually flat: down 0.49 points to 20,973.45.

Among other top-line gainers, British American Tobacco added 1 per cent, or 39p, to 2,999p after reaffirming full-year guidance for 2024, helped by a stronger second half driven by investments in its operations in USA and innovation in its portfolio of new categories.

Consumer goods giant Reckitt Benckiser rose 2.8 per cent, or 132 pence, to 4,835 pence after an upgrade to “buy” from “hold” by HSBC analysts, who noted it is trading at a discount significant relative to its peers and raised its target price to 5,500 pence.

And Endeavor Mining gained 5.9 per cent, or 89 pence, to 1,589 pence, as it revealed a definitive feasibility study on an Ivory Coast gold project after a preliminary assessment met strategic objectives.

On the downside, equipment rental company Ashtead Group fell 1.7 per cent, or 92 pence, to 5,300 pence after falling 14 per cent following a guidance cut in the previous session.

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

And SSP firmed 2.5 per cent, or 4.7 pence, to 191.5 pence after the owner of Upper Crust announced plans for a spring initial public offering (IPO) of its Indian joint venture, Travel Food Services.

Among small caps, Sound Energy rose 53.9 per cent, or 0.35p, to 1p as the gas project developer completed the partial divestment of its Moroccan assets for up to £35.4m .

Victoria gained 6.6 per cent, or 3.8 pence, to 61.8 pence, adding to a jump in the previous session made after the carpet firm’s chief executive bought 200,000 shares and Morgan Stanley increased its stake. to 12.5 percent.

Fintech company Equals Group added 12.1 per cent, or 14.5p, to 134.5p after agreeing a £283m 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 lost 16.9 per cent, or 0.01 pence, to 0.03 pence, having gained almost 23 per cent in two sessions this week after announcing a distribution deal for a biosensor chip product in the United Kingdom and Europe.