IAG Share Price Forecast: Is a Jump to 180p Imminent?

IAG share price has been range-bound for the past week amid recession fears in the UK. The stock has slumped 12.12% YTD in price. However, the IAG stock has made a strong recovery in the past 3 months, climbing by more than 24%. The company has a total market capitalization of £6.64 billion.

IAG 2022 Performance

International Airlines Group SA is one of the world’s largest airline groups, with a fleet of 531 aircraft. The company engages in the provision of passenger and freight air transportation services. IAG operates through brands like British Airways, Iberia, Vueling, Aer Lingus, and other group companies.

IAG share price has made a strong recovery in the past few months as the firm struggles to bounce back to its pre-pandemic levels. The decline in oil prices has boosted the firm’s performance as jet fuels are likely to plunge in the near term. West Texas Intermediate and Brent Crude prices have been on a strong downward trend for the past few months.

According to the company’s latest financial results, IAG reported an operating profit of £1.2 billion in the third quarter compared to the £452 million operating loss in the same quarter last year. operating profit for the nine months to September came in at £770 million. As of September 30, IAG’s net debt was down £609 million to £11 billion.

 The increase in travel demand has also boosted the company’s performance this year. Passenger capacity in the third quarter was 81.1% of 2019 up from 78% in the previous quarter. This was driven primarily by IAG’s key regions of European, North America, Latin America, and the Caribbean.

Despite the improvement, the company is facing challenges like soaring inflation which has seen supplier costs rise. Rising employee costs, as well as slightly lower passenger numbers, compared to 2019, continue weighing on the firm’s performance.

IAG Share Price Forecast

The daily chart shows that IAG share price has been on a strong bullish run for the past few months before breaking out to trade sideways. At the time of writing, the stock was trading 1.31% higher at 134.48p. It is moving along and above the 25-day and 50-day moving averages respectively. Its Relative Strength Index (RSI) is at 61, slightly below the overbought region.

Therefore with the increase in travel demand, the stock is likely to initiate a bull run in the near term. If this happens, bulls will be targeting this year’s high at 180p. On the flip side, a move below the important support level at 122p will invalidate this view.

IAG price chart

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