IAG shares (LON: IAG) are listed on the London Stock Exchange (LSE) under the ticker symbol “IAG” and are also included in the FTSE 100 index. Its shares are also listed on the Spanish Stock Exchanges.
Anglo-Spanish multinational airline holding company International Consolidated Airlines Group (IAG) is headquartered in London, United Kingdom.
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IAG EPS and Revenue Breakdown 2020-2023
| IAG | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | -122.6 cents | €7.80 billion |
| 2021 | -61.2 cents | €8.46 billion |
| 2022 | 5.6 cents | €23.07 billion |
| 2023 | 50.6 cents | €29.45 billion |
IAG was formed in January 2011 and is the parent company of British Airways, Iberia, Vueling, Aer Lingus, LEVEL, IAG Loyalty and IAG Cargo. While it is a Spanish-registered company, IAG’s corporate head office is in London, UK. The airline group operates globally, making it one of the largest airline groups in the world, with over 71,000 employees and a fleet of over 580 aircraft.
Airline Industry Comparison
IAG Share Price & Dividend Yield
Since the plunge during the pandemic, the IAG share price has experienced a lack of growth, despite many investors feeling it should be higher. While the travel industry continues to recover, aspects such as the reduction of its debt pile and the reinstallment of dividend payments may provide the share price with a boost.
IAG’s last dividend was paid in 2019 before it was halted due to the pandemic. However, the company said it will look to restart dividend payments “as soon as the operating environment and resulting financial performance of the group permit.” That has now happened, with the payment due to be issued in September
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IAG Share Price Forecast
Overall, according to data compiled by TradingView, out of 27 analysts covering the stock, 19 currently have a Buy rating on IAG shares. Seven have given the stock a Hold rating, and one analyst has assigned the airline a Sell rating. The average 12-month price target is 217.1p.
In March, IAG’s rating was upgraded to Outperform from Sector Perform at RBC Capital. The bank lifted the price target to 220p from 200p, noting that IAG now generates the second-highest margins in the group behind Ryanair. However, they argue that it also, by some metrics, trades on the cheapest valuation among the airlines. Furthermore, RBC highlighted airline capacity data that suggests North Atlantic capacity is set to be more of a tailwind for IAG’s British Airways and Aer Lingus airlines this summer.
Exane BNP Paribas upgraded IAG to Outperform from Underperform in March, assigning the stock a 210p price target. The bank argued that the company has “fixed” the bear thesis as leverage is down and shareholder returns are improving.
Our View: IAG is a well-known and regarded airline group with various names under its banner. However, the headwinds for the group in recent years have resulted in investors remaining cautious. While there is a lot to like about the stock, especially from a potential value standpoint, those aforementioned risks should still be assessed first.
Stock Suitability
Investing in IAG shares can be an intriguing opportunity within the airline sector, but it’s not a fit for every investor’s portfolio. Here’s a breakdown of who should consider buying IAG shares:
As with any airline stock, investing in IAG comes with inherent risks. Potential investors should have a moderate to high risk tolerance and understand the volatility associated with the aviation industry and the company, more specifically, given its elevated debt levels. In addition, assess factors such as fuel prices, economic fluctuations, and geopolitical tensions, as these can significantly impact IAG’s performance.
While IAG has historically been known to offer dividends to its shareholders, it hasn’t paid a dividend since before the pandemic for obvious reasons. Nevertheless, for now, income-focused investors may prefer other stocks.
Despite short-term challenges, many analysts believe IAG holds promising long-term growth potential. Investors with a patient, long-term investment horizon may find IAG shares attractive.
Value investors may see IAG’s current stock price as potentially undervalued, considering its market position and potential for future dividend payments.
