International Airlines Group Share Price Forecast December 2021 – Time to Buy IAG?
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Shares of International Airlines Group (LSE: IAG) are in the red today, currently trading at 138p at the time of writing. The shares have been going up and down in the past 30 days and the resurgence of pandemic concerns seems to be the reason. On 25th November, the announcement of the Omicron variant sent the share price tumbling almost 15%. While IAG shares have fallen by almost 12% in a year, it jumped 8% on Monday.
International Airlines Group – Technical Analysis
International Airlines Group’s financial statement indicates a market cap of £704.985 billion with total assets worth £2.873 trillion. Revenue for 2020 was at £699.44 billion with a profit margin of -87.99% compared to £2237.73 billion in 2019. It reported an operating loss of €452 million in Q3. Operating losses reached €2,487 million over the nine months to 30 September.
Oscillators such as Relative Strength Index (14)(40.26), Stochastic %K (14, 3, 3)(56.37), Commodity Channel Index (20)(−42.61), Average Directional Index (14)(34.01) and Awesome Oscillator(−15.69) are neutral. Moving averages such as Exponential Moving Average (20)(145.03), Simple Moving Average (20)(145.14), Exponential Moving Average (30)(149.41), Simple Moving Average (30)(153.58) and Exponential Moving Average (50)(155.06) are indicating a sell action.
68% of all retail investor accounts lose money when trading CFDs with this provider.
Recent Developments
IAG was born out of the merger between Iberia and British Airways in 2011, becoming one of the largest airline groups with over four hundred aircraft flying 55 million passengers to 200 destinations. Since its inception, the company has expanded its portfolio of operations and brands by purchasing other airlines such as BMI, Vueling and Aer Lingus. The company announced that British Airways will terminate its major short- and medium-haul base operations at Gatwick Airport with immediate effect resulting in September 2021. This resulted in the cancellation of 30+ routes.
Revenues for the third quarter more than doubled from last year due to an increase in passenger travel and fuel costs did not wreak havoc on IAG’s financials during this period. It’s expected that the global aviation industry will bounce back to 2019 levels next year. Almost every airline will be able to look forward once the traffic recovers to pre-pandemic levels. In IAG’s case, a recovery in international travel will be the most crucial development for the company as it relies heavily on lucrative transatlantic and long-haul travel routes. Traffic on international routes remain underwhelming despite domestic routes in US and Europe recovering. An earnings recovery for IAG will only be possible if international traffic recovers. Covid is continuing to impact its balance sheet as well, with the company forced to take on almost £4 billion in debts.
Should You Buy IAG Shares?
Investors interested in IAG have to think about the worst-case scenario which is a return to March 2020 conditions where the government travel bans will force the aviation industry back into cold storage. IAG maybe forced to look to its investors and creditors to provide additional financing. Shares can drastically fall if this happens and it all depends on the company’s current financial position.
While IAG shares look cheap, it has reasons behind it. Covid fears as well as the firm’s poor results have been a red flag for investors. While the now down travel industry could provide a good investment opportunity, it is too risky for normal investors to consider at the moment. Investors should wait and see how the company performs before they consider adding its shares to their portfolios.
Buy IAG Stock at eToro from just $50 Now!
