DAVY VIEW

IAG has announced a buyback programme of €350m running to end-February. The Q3 results were strong with an operating result of €2,013m (consensus median: €1,776m; Davy: €1,802m). While no formal guidance was given, IAG said that it expects “our strong financial performance to continue for the rest of the year” – consensus median €3,691m (Davy: €3,625m). With a nine-month operating profit of €3,322m, and assuming last year’s run rate and lower fuel, we would expect consensus to move to >€4bn. While leverage will increase modestly by December 31st 2024 with normal seasonal working capital, net debt to EBITDA at 1x is well below target, hence the buyback which is small by historical standards.