Airlines & airports (AO) | Iran crisis - Beginning of the end?

Research evidence excerpt

Airlines & airports (AO) | Iran crisis - Beginning of the end?

s or days until a deal is signed as soon as Friday.

It will take a while for oil traffic to normalise and for inventories to be replenished. Thus, we would not expect a return to pre-war

oil price levels any time soon. That said, oil prices will hopefully not hit crisis levels any time soon either. Consequently, bear-case

scenarios that envisioned a permanent closure of the Strait and dire prospects for the airline sector should gradually be priced

out, lifting stock prices.

Regardless of the actual kerosene supply situation, the perceived end of the conflict will likely have a positive impact on

outstanding bookings for the summer travel season. It is our understanding that many travellers postponed bookings until they

individually felt the risk of short-term kerosene supply disruption was low enough to proceed. We doubt that holiday-makers will

busy themselves with the actual details of the kerosene supply chain, and rather take the news of the reopening of the Strait at

face value, which should jump-start the booking cycle once the signing of the deal takes place and press reports confirm that

vessels exited the Strait.

Sector Most Preferred Stocks Sector Least Preferred Stocks

Company Rating Target Price Upside Company Rating Target Price Upside

Fraport Buy EUR91.00 EUR70.45 29% Wizz Air Holdings Reduce 880p 1080.00p -19%

IAG Buy 500p 436.20p 15%

Ryanair Buy EUR30.00 EUR25.09 20%

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