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Do you want to invest in airlines? Large firms agree on which is the best option

The airlines they are in the crosshairs of investors because the crisis is beginning to be overcome and it is evident that they are going to notice this recovery especially after having been hit hard. However, not all like them equally. In fact, very relevant firms, such as Goldman Sachs, HSBC or Citi They agree that there is a group of them in which it is especially interesting to put the money.

“The positioning of the investors is in the low cost”Citi experts say in a report released this week. The past, HSBC was also particularly favorable to low cost airlines (Ryanair, easyJet and Wizz) in the process of sectoral recovery, while Goldman indicated its preference for this segment at the beginning of the month, where are you waiting “strong earnings growth in the coming years”.

Beyond the recovery that the entire sector is experiencing and will continue to experience, what worries the experts are structural problems in the airlines themselves, and what they are looking for are companies with the capacity to face them and reduce costs. “We prefer airlines that are likely to see their market share increase and have a solid record of cost management,” they say from Citi. In this sense, they include IAG also among its bets in the sector as your favorite in the traditional airline segment.

Different firms have referred to the structural changes at IAG and its ability to save costs. Credit Suisse I was already talking at the beginning of the year about “the importance of structural savings in personnel of European airlines for the recovery of their margins “, and there he pointed directly to IAG, which is ahead of its European counterparts. JP Morgan has also recently commented on its preference for IAG also due to the “significant savings in structural costs that it has achieved” … and so on a long etcetera of firms.

RYANAIR, EASYJET AND WIZZ

But it is the low-cost airlines that constitute the ‘top 1′ of analysts’ preferences. Citi indicates that, in a “mixed” context, in which supply will be “rationalized” but, at the same time, the sector continues to face significant structural costs, investors must look for winners, and that’s where this group of airlines comes in.

We prefer Ryanair and Wizz (…) We raised easyJet’s rating to ‘neutral’ as the company will benefit from Air France-KLM and Lufthansa problems. We maintain our recommendation of ‘sell’ on Lufthansa and of ‘sell, with high risk’, on Air France “, they explain. In the traditional segment, your “winner”, as noted above, is IAG.

It should be remembered that just a week ago, HSBC went up to Ryanair and easyJet to ‘buy’ from ‘hold’ and to Wizz to ‘hold’ from ‘reduce’. As for the target prices, it raised Ryanair’s to 19 euros from 16.75 euros and easyJet’s to 12 pounds from 10 pounds. Regarding the Wizz Air, it raised it to 45 pounds from 40 pounds.

Earlier this month, Goldman sachs it raised ‘buy’ from ‘neutral’ to easyJet and reiterated ‘buy’ on Ryanair.

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