International Consolidated Airlines Group SA  

International Consolidated Airlines Group SA (LSE: IAG) is an FTSE 100 index-listed European aviation conglomerate that operates flights under the British Airways, Iberia, Aer Lingus, and Vueling banners. Over the past period, the company transported 264 million travellers to 185 destinations worldwide. Its primary airport hubs are situated in London Heathrow, London Gatwick, Madrid, Barcelona, and Dublin. The company primarily generates a significant portion of its income from the United Kingdom. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 171.50

• Resistance near Current levels: IAG’s stock price crossed the Resistance (R1) stated in the previous report on 31 January 2024, and might witness some sell-off from the current levels. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Declining liquidity ratios: The group’s quick ratio for FY23 was reported at 0.60x, which is lower than the industry median of 0.80x. Further, IAG’s current ratio declined to 0.63x during FY23, against the industry median of 0.89x.
• Inefficient Debt Management: During FY23, the company reported a higher Debt/ Equity ratio of 4.92x, when measured against the industry median of 1.14x. Further, the % of long-term Debt to the Total Capital of IAG was 71.40% in FY23, as compared to the industry median of 35.9%.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on International Consolidated Airlines Group SA (LSE: IAG) has been given at the closing market price of GBX 171.50 (as of 27 March 2024).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 27 March 2024.  The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’