IAG posts 17.7% adjusted operating margin and advances buyback
The Wall Street Journal’s Nov. 9 roundup said the latest Market Talks covering the auto and transport sector were published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET. The roundup carried an 0830 GMT timestamp for Pirelli, 1234 GMT for International Consolidated Airlines, 1412 GMT for BlackBerry and 2244 GMT for Qantas.
BlackBerry’s embedded software business was gaining commercial ground in China. The Canadian company partnered with Valeo to integrate its QNX operating system for safety into Valeo’s new front-view smart camera platform. BlackBerry and Valeo secured design wins with multiple Chinese automakers ahead of production later this year.
The platform combines Valeo’s sensor hardware and software stack with QNX’s real-time operating system to support driver-assistance tasks like pedestrian and road marking detection. The latest design wins will add to the current base of 275 million vehicles globally that have the QNX software embedded.
International Consolidated Airlines, the British Airways owner, reported a strong third-quarter performance with an adjusted operating margin of 17.7%. IAG backed adjusted operating margin guidance of at least 12% for the year and started the final part of its 1.5 billion euro buyback program.
Bernstein analysts Alex Irving and Antoine Madre assessed IAG as better able to withstand higher fuel prices and still return over 50% of its market capitalization to shareholders over the next five years. “The core business is in good shape…IAG is still delivering double-digit margins in a fuel crisis,” they said. Bernstein has an outperform rating on the stock and a 555 pence target price. Shares were up 2.5% at 444.70 pence and 7.3% higher over the year to date.
Pirelli, the Italian tire maker, had a solid third quarter, but Citi analysts said cost inflation reduced the probability of EBIT growth in 2027. Pirelli’s management highlighted a challenging backdrop for EBIT growth. Citi said third-quarter results commentary suggested around 1.08 billion euros was the best estimate for 2026 adjusted EBIT. Citi added that the estimate put the implied adjusted EBIT margin in the fourth quarter at around 14.8%, landing under 15% for the first time since the fourth quarter of 2023.
Citi said Pirelli’s margins were likely to fall about 30 basis points in 2027, suggesting a flat EBIT outcome was the best base case for now. Citi maintained a neutral share rating and lowered its target price to 7.20 euros from 7.50 euros. Pirelli shares fell 0.2% to 6.79 euros.
Morgans downgraded Qantas Airways to hold from accumulate as fuel costs crept higher against a backdrop of ongoing Middle East tensions. Qantas’s first-half fuel bill was set to swell to A$3.75 billion, although the airline said travel demand remained resilient.
Morgans analyst Chris Creech was positive on the quality of Qantas’s business and said its fleet-renewal program should help drive earnings growth over time. “However, elevated fuel prices, higher operating costs and broader inflationary pressures continue to weigh on near-term earnings, with FY27 underlying pretax profit expected to decline materially (-21%) on prior forecasts before earnings growth resumes from FY28 onwards,” Morgans said. The bank viewed FY27 as a transition year for Qantas, whose stock ended last week at A$9.45.