JPM places IAG on Positive, Lufthansa on Negative Catalyst Watch

Investing.com -- JPMorgan has placed International Consolidated Airlines Group (IAG) on its Positive Catalyst Watch and Lufthansa (ETR:LHAG) on its Negative Catalyst Watch heading into the second half of the year, pointing to diverging trends in Transatlantic performance and market positioning.

The bank said IAG (LON:ICAG) could benefit from “continued pricing outperformance leading to consensus upgrades,” while Lufthansa may face the opposite scenario.

Three key Transatlantic factors underpin the view, including constrained market capacity at IAG’s core routes, favorable volume trends in and out of the U.S. for the British Airways owner, and strong premium demand where IAG has the highest premium seat penetration among peers.

Transatlantic performance remains central for investors due to its "prominence and profitability," JPMorgan analysts said. 

“We estimate IAG has the highest premium seat penetration on the Transatlantic,” the analysts noted, adding that volume growth on U.S. routes is currently “positive for IAG’s core markets and negative for Lufthansa and Air France-KLM.”

Outside of the Transatlantic, pricing trends are seen as broadly offsetting. IAG continues to benefit from strong demand in Latin America amid moderating capacity, while Lufthansa and Air France KLM (EPA:AIRF) could see some support from Asia-Pacific markets due to easier year-on-year comparisons.

All three carriers, however, face some potential disruption tied to Middle East geopolitical risks.

JPMorgan raised its 2025 EBIT forecast for IAG by 3% on “lower fuel/slightly better unit revenues,” and now sits around 6% above Bloomberg consensus.

In contrast, the bank lowered its 2025 EBIT forecast for Lufthansa by 3% on “slightly lower unit revenues,” placing it 9% below consensus. Estimates for the second quarter remain unchanged.

While both IAG and Lufthansa shares are up about 20% year-to-date (YTD), JPMorgan believes the performance gap may widen going forward.

“Although the buy-side are broadly positive already on IAG and negative on Lufthansa, we see potential for the YTD performance to diverge from here,” analysts said.

IAG remains on JPMorgan’s Analyst Focus List with around 30% upside to its unchanged December 2026 price target of €5.50.

The bank maintains an Overweight rating on IAG, Neutral on Air France-KLM, and Underweight on Lufthansa.