MS picks IAG as its top pick as it leads European airlines on profitability

Jet2

15/10/2025 09:18

** Morgan Stanley initiates British Airways and Iberia owner IAG ICAG.L and low-cost carrier Ryanair RYA.I on "overweight" as they lead European airlines on profitability and cash returns

** The brokerage picks IAG as its top pick, as it sees the Anglo-Spanish group benefiting from disciplined capacity on profitable long-haul routes and expects an upgraded full year 2025 EBIT

** "IAG is well positioned to benefit from disciplined capacity on its highly profitable transatlantic routes ... other European flag carriers ... are likely to come under increasing pressure from intensifying US carrier competition", it says

** It starts Air France-KLM AIRF.PA, Jet2 JET2.L and Wizz Air WIZZ.L at "equal-weight" arguing that the valuation risks are already reflected or that consensus seems credible

** It also initiates Lufthansa LHAG.DE and EasyJet EZJ.L at "underweight", citing a challenging outlook for the former and earnings risks for the latter

COMPANY
RATING
PT
Air France-KLM
Equal-weight
11.3 euros
EasyJet
Underweight
400p
IAG
Overweight
5.5 euros
Jet2
Equal-weight
1420p
Lufthansa
Underweight
5.4 euros
Ryanair
Overweight
30.7 euros
Wizz Air
Equal-weight
1080p

 (Reporting by Javi West Larrañaga)

 ((javier.west@thomsonreuters.com; +34 918 35 61 12))