The share of International Consolidated Airlines Group, S.A. (GB:IAG) has garnered increased confidence from analysts following outstanding financial numbers for the first half of 2023. Post-results, the share price soared and has gained over 11% in the last five days. Yesterday, the stock gained 4.13% in a day after analysts confirmed their ratings on the stock.
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Despite a robust recovery in the aviation industry during the year 2022, the company’s share price struggled to perform well. However, the stock has shown strong performance in 2023, with a YTD gain of 32%.
IAG is a group company that owns and operates leading airlines in Ireland, Spain, and the UK, providing comprehensive support to bolster their market presence. The majority of the company’s revenue comes from British Airways.
Improved Figures and an Even Brighter Outlook
For its first-half earnings, the company’s revenue increased by 45% to €13.6 billion. Consequently, the firm transitioned from a loss of €417 million in the previous year to an operating profit of €1.3 billion. The company surpassed analysts’ forecasts by around 40%. The higher numbers were mainly driven by the lifting of pandemic restrictions, resulting in a surge in demand for leisure travel along with increased fares.
The passenger capacity improved to 94% of pre-COVID levels, a significant increase from the 86.6% capacity observed in the fourth quarter of 2022. The company anticipates that capacity for the entire year will reach 97% of the levels recorded in 2019.
Following the release of the results, analysts expressed optimism about the company’s share price, driven by a more favorable outlook and the ongoing recovery in the travel industry. Analysts also believe that with higher capacity, the company has the most favorable opportunity to capitalize on the current demand.
Among these, Barclays analyst Andrew Lobbenberg has the highest price target of 245p, which implies an upside of 43.3% in the share price.
What is the Future of IAG’s Share Price?
IAG stock has a Moderate Buy rating on TipRanks, backed by five Buy and eight Hold recommendations. The average price forecast is 206.6p, which is 20% higher than the current trading level.
