Bad news for IAG. JP Morgan has reviewed its position in the airline holding company on Tuesday and has lowered its target price by more than 70% up to 2.5 euros. The last change made by the US financial company occurred last December and then it stood at 9 euros.
Despite the hack, from JP Morgan they are slightly objective and believe that IAG will raise something in the coming months, currently trading at around 2.2 euros. The cut has not caused important changes in its price this Tuesday and registers increases close to 0.5%.
The target price is not the only thing that JP Morgan has lowered, so has its recommendation, going from advising to buy to only hold. The financial analyst justifies these decisions by claiming that has a "challenging and uncertain" outlook.
The bank claims that IAG has a strong portfolio and respected management, but is not being oblivious to the Covid-19 crisis which positions it in the face of uncertain prospects.
Although not everything is negative news. From JP Morgan they stand out the capital increase of 2,750 million announced by IAG at the end of July, together with the presentation of its results. The financial company ensures that thanks to this movement it will have sufficient liquidity to overcome an extreme scenario of a block of another 15 months.
JP Morgan is just one of many who have reviewed their position at IAG since the crisis began. Indeed, there has been a most optimistic stampede. In mid-March, 96% of those who follow her on 'FactSet' recommended taking positions and only 4% recommended keeping the titles.
Some data that currently they are at 64% of favorable recommendations, compared to 32% of analysts who recommend keeping and 4% who say that it is the best time to get rid of the shares.
The loss of favorable recommendations coincides with a bad moment in the stock market, so far this year it has plummeted close to 70%. However, in recent weeks there have been significant increases, between August 21 and 28 they have managed to advance more than 13% adding five consecutive days in green.
The last green numbers invite you to have a certain optimism. "What now begins as a simple rebound may, with the passage of time, end up being something more than that. Thus, the truth is that what we have before us are bullish divergences", explains José María Rodríguez, technical analyst at ForexNews.online.