Financial market research and analysis

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IAG, BG, RBS and more
The enthusiasm in FTSE is contained today with energy stocks leading the losses in London.

IAG (-4.1%) Q3 operating profit of €1.25bn, ahead of expectations for €1.23M was a vast increase profit for the same period last year of €900m. Clearly the demise of the oil price has been to the benefit of all the major airlines. Raising FY guidance to €2.25-2.3b but valuation at 9x next year’s PE when Lufthansa is on 6X has led Cantor Fitzgerald to stick a sell rating on the stock. Having traded close to its 52 week high yesterday we are seeing some profit taking today. Majority of brokers are bullish on the company with an average target price of 698p.

BG Group (-0.17%) Profits beat estimates and the company has raised its production forecast. Shares are up 19% this year and remain some 10% below Shell’s offer price. Average broker target price is 1250p.

Rolls Royce (+1.4%) Evaluating whether a trend toward bigger planes will provide an opening for it to re-enter the short-haul engine market, according to a person with direct knowledge of the company’s plans.’

RBS (-1.3%) Royal Bank of Scotland reported a drop in Q3 profits owing to restructurung charges missing estimates. Also warned future costs relating to litigation and past misconduct will be much higher than expected.

Meggitt ( +2%) Raised to neutral v underweight at JP Morgan