MARKET REPORT: Investors urged to get back on board BA-owner IAG

Investors snapped up shares in British Airways-owner IAG yesterday as the City enthusiastically upgraded the airlines group.

Its stock is a steal after another washout summer hit travel firms hard, according to analyst Gerald Khoo at Liberum, who bumped IAG from ‘hold’ to ‘buy’.

He believes the current price is an ‘attractive entry point’ and urged investors get behind the FTSE 100 giant. Its shares rose 1.3 per cent, or 2.12p, to 168.98p.

Ready for take-off: Analysts at Liberium say they are confident air travel will make a convincing recovery and have tipped BA owner IAG is being tipped as a good long-term bet

IAG gains helped push the FTSE 100 to a fresh 18- month high, rising 0.8 per cent, up 59.1 points, to 7220.14.

British Airways is IAG’s major earner, but it has a stable of carriers including Aer Lingus and Iberia, which has helped it survive the slump in transatlantic flights since the pandemic broke out.

Liberum had been conservative about airlines this summer – but Khoo said it has been even more disappointing than feared.

However IAG could be a good long-term bet. Khoo said: ‘The path to recovery from the pandemic will be neither straight nor simple, but we are confident air travel will make a convincing recovery in the medium term, and IAG remains a structural winner.’

Stock Watch – Xeros 

Xeros Technology Group tumbled as the washing machine maker said the rampant spread of the Delta Covid variant in India would hold back product launches.

Machines will not go on sale until next year, a delay of a few months from a previous schedule of late 2021.

AIM-listed Xeros said it was ‘not expected to reduce the medium and long-term prospects for success’, but warned that licensing revenues would be hit this year.

Shares in the group, which recently sold its first commercial washing machine in the country, fell 7.6 per cent, or 15.75p, to 191.75p.

In the short term it has lots of cash available and the strongest slot position at Heathrow, which is still one of the world’s major hubs and the ‘largest and most attractive origin and destination in Europe’.

Liberum’s deep-dive came as Heathrow said more people had travelled through the airport. Its terminals handled 1.5m people in July, though this is still far below the start of the pandemic.

Hostelworld also said it was seeing the green shoots of recovery.

Revenue was down a bruising 76 per cent in the six months to June 30, compared with the same period of last year. Bookings fell 73 per cent from 1.1m to around 300,000. 

But boss Gary Morrison said customers were booking beds and rooms at places where travel restrictions had been lifted, such as southern Europe, and in the US, where people are opting for staycations.

Shares rose in early trading but closed flat at 95p. The Irish holiday group was one of a slew of firms to give financial updates.

Doorstep lender Provident Financial rose 10.2 per cent, or 31.2p, to 338.4p, despite losses widening to £44million as its consumer credit division was ordered to pay millions back to customers sold unaffordable loans from 2007 to 2020.

Excluding its consumer credit division, profits jumped to £63.5million from £5million last year.

The FTSE 250 rose 0.8 per cent, or 184.78 points, to 23756.83. The index was boosted by advances in BP (up 0.9 per cent, or 2.8p, to 311.7p) and Royal Dutch Shell (up 1 per cent, or 14p, to 1481.4p) shares. 

They rose even though oil prices stumbled after White House officials urged Opec+, a cartel including Saudi Arabia, Mexico and Russia, to increase production above what they have agreed.

The US says this would help keep fuel price inflation in check.

National security adviser Jake Sullivan said: ‘Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery.

‘President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump. 

Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more.’ Brent crude fell 1pc to hover at $70 a barrel.

Over on AIM, cancer therapy developer Bivictrix Therapeutics had a stellar first day of trading.

The company is led by one of the youngest female chief executives in the biotech field, 33-year-old Tiffany Thorn. 

Its treatments help differentiate between cancerous and healthy cells, enabling doctors to be more precise and potentially give higher doses of medication. It listed at 20p but finished at 25.5p, a rise of 27.5 per cent.

This post first appeared on Dailymail.co.uk