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IAG share price nears key level ahead of FY earnings: buy, sell, hold?

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

The IAG (LON: IAG) share price has staged a strong recovery in the past two weeks as investors focus on the upcoming financial results. The shares jumped to a high of 156p on Tuesday, the highest point since January 26th. It remains about 27% above the lowest point in 2023.

IAG earnings preview

International Consolidated Airline, the parent company of British Airways and Aer Lingus, will publish its full-year financial results on Thursday. 

These results will likely show that its total revenue and profitability bounced back in 2023 as demand for regional and international flying surged.

Analysts tracking IAG expect that its operating profit jumped to €507 million in the fourth quarter of last year. They also believe that its annual operating profit rose to €3.5 billion in the full year.

However, analysts also expect that its profit’s trajectory has peaked. According to IAG’s website, they expect that the company’s operating profit for this year will be €3.3 billion. Therefore, this week’s financial report will provide more colour about its business.

The most recent results showed that the company’s revenue jumped to over €22 billion in the first nine months of the year. They also revealed that its profit after tax came in at €2.1 billion while the management reduced its borrowings to €17.2 billion.

IAG, like other airline companies, is doing well as business and leisure travel rebound after tumbling during the COVID-19 pandemic. 

According to IATA, airline profits are expected to do well this year. The agency estimates that the biggest companies in the industry will get to over $25.7 billion this year as revenue is expected to near $1 trillion. 

Still, IAG is facing numerous challenges. For example, jet fuel prices have remained at an elevated level. IATA’s average jet fuel price stands at $109.66 bbl, a 0.8% increase from the previous month. 

The other challenge is competition in the industry, which could affect its pricing benefit. Most recently, British Airways had the worst rating for customer satisfaction.

IAG share price forecastIAG share price

IAG chart by TradingView

Turning to the daily chart, we see that the IAG stock price has bounced back in the past few days. This rebound happened after the stock dropped to the key support level at 142.55p, which was along the ascending trendline that connects the lowest swings since December last year. 

The stock has moved above the 23.6% Fibonacci Retracement level and the 50-day and 25-day Exponential Moving Averages (EMA). It is also attempting to move above the key resistance point at 157.25, the highest swing on January 25th. 

Therefore, a move above this resistance level will trigger more upside in the coming days as buyers target the key point at 165.30p, the highest swing on November 21st.

The post IAG share price nears key level ahead of FY earnings: buy, sell, hold? appeared first on Invezz

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