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IAG share price forecast 2024 as IATA estimates strong airline profits

By: Invezz
u.s. fines iag's british airways $1.1 million

International Consolidated Airline (LON: IAG) share price had a mixed performance in 2023 even as its profitability boomed. After peaking at 173.55p in February, the stock pulled back by over 9% to the current 157p. It remains about 74% above its lowest point in 2022.

IAG recovery continued

The aviation sector staged a strong recovery in 2023 as demand for tourism and business travel boomed. Most companies in the sector reported strong revenue growth as the load factor increased.

IAG, the parent company of British Airways, also had a good performance during the year. Its revenue for the first nine months of the year soared to over €22.2 billion from the previous year’s €16.6 billion. Its profit after tax jumped to €2.15 billion from €199 million a year earlier.

The same trend happened in the third quarter as its revenue rose to €8.6 billion and its profit after tax moved to €1.23 billion. Most importantly, the company also reduced its net debt to €8 billion from €10 billion a year earlier. Its access to liquidity rose to €13.6 billion.

These results mean that the company is doing well. And most importantly, it is recovering across its top brands like Aer Lingus, British Airways, Iberia, and Vueling. British Airways revenue rose by 20% in Q3 as demand for the TransAtlantic route continued. 

Looking ahead, several tailwinds could boost IAG’s business. First, inflation is falling in key countries in the developed world. While this could impact airfares, it will also lead to more demand and lower operation costs. 

Also, falling inflation means that key central banks like the Fed, BoE, and ECB will start lowering rates in 2023. The company will also benefit from the relatively stable oil prices. The most recent report by IATA estimates that the average jet fuel price dropped by 3.1% last week to $292.

Meanwhile, IATA estimates that demand and profitability will continue rising in the coming months. It boosted its 2023 revenue estimates to $896 billion as demand rose. For 2024, the agency expects that revenue will rise by 7.6% to over $964 billion. 

Profits are expected to jump to over $25.7 billion. It expects 4.7 billion people will travel in 2024. IAG, as one of the biggest aviation companies in the world, will benefit from this trend.

IAG share price analysis

IAG chart by TradingView

The daily chart shows that the IAG stock price has moved sideways in the past few weeks as investors wait for the next catalyst. The stock remains at the first support of the Andrews Pitchfork tool. It has moved slightly above the 50-day and 25-day Exponential Moving Averages (EMA). 

A closer look shows that the stock has formed an inverse head and shoulders pattern, a popular bullish sign. The neckline of this pattern is shown in black. Therefore, the outlook for the shares in 2024 is bullish, with the initial level to watch being the YTD high of 173.55p. A move above that level will see it continue rising as buyers target the resistance at 500p.

The post IAG share price forecast 2024 as IATA estimates strong airline profits appeared first on Invezz

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