IAG shares on road to recovery ?

Hi everyone! Hope you’re all well.

Wondering what everyone’s thoughts are on IAG ?

With the vaccinations rolling out does anyone share my opinion that BA and others are going to start the recovery process ? Discuss… hopefully :crossed_fingers:t3:

A few other European countries are talking of imposing some lock downs, Portugal being one of the latest and most countries don’t believe everyone will be vaccinated until Autumn/Winter this year so I believe it could get a little worse before it gets better.

However with the likes of Norwegian Air selling off their long-haul routes and a new chairman in the hot seat after a few rocky months I recon the stock could take off ( sorry for the cheesy pun :joy: )

1 Like

Interesting. Maybe an IAG drop leading to another investment opportunity?

Surely they are going to recover at some point?

As for Norwegian air, sounds like one to watch.

Thanks for taking the time to reply!

1 Like

Yeah I believe there may be another slight drop due to the confirmation of the expected class action lawsuit against them for the breach in 2018, a few countries locking down, their EV score shows them as a stock to avoid, they increased their debt to £10bn as per their third quarter results and they will need to raise more liquidity to get through 2021 however if they can overcome the above and the vaccines tale care of Covid-19 I think we can expect their price to increase by 400% by 2023.

I have been looking at them for a while and think I will buy £100 worth tomorrow as long as the price is less than 165p then another £150 at 150p and £300 if they get to 125p which I don’t think they will

As expected this is the drop I was expecting to come… I unexpectedly didn’t foresee them to go out and buy Air Europa for €500m which also caused prices to drop slightly.

All the charts show bearish signals so we can expect a bit more of a dip to come maybe even to the 125p range that I mentioned, if it dips under this we could see a plunge to the 100p region therefore with the new addition of Air Europa and the current and future potential dips I think if you are willing to hold IAG for around 2 years I think we will see some sizeable returns of 200-300% in that time!

I am waiting for the 115-120p level to top up, nonetheless I have about 3% of my portfolio in IAG though and follow it.

I think that the Air Europa acquisition is good for the company and bad for customers as it will leave spanish clients with limited choice, particularly on internal flights. They also managed to reduce and more importantly delay the payment so it should not affect their short term cash flow and more their mid-term debt.

Obviously the main risk I see is the debt.
Coupled with the fact that it tends to offer “premium” fares compared to Easyjet, Ryanair, Norwegian, etc therefore IAG may take longer to recover than the “cheap” competitors.
(Similar situation to KLM-Air France, Lufthansa, etc)

We may find that ‘cheap competitors’ may have to hike prices to recover losses so may work to the favour of IAG for already having a setup for a slightly premium service.

Yeah I agree I think it was a good acquisition and took advantage of Air Europa’s low valuation due to the pandemic. Regarding cashflow I am sure I read yesterday that IAG have six years to disburse the payment for Air Europa shares.

Yes debt has increased quite a lot which is what’s causing a lot of the bearish doubts however IAG have some routes that the cheaper airlines don’t especially seen as some of them have sold off some of their routes which will help IAG.

Banks are currently bullish on IAG I think I saw that 16 of the 23 who have assessed them have them down for buy with an average price of over 200p

1 Like

It seems IAG are fairly confident they will be back with a bang.

I will certainly be keeping an eye on them to see if they do dip down a bit lower.