International Consolidated Airlines Group, S.A.

International Consolidated Airlines Group, S.A. (LON: IAG) is an FTSE 100 listed Airline conglomerate that own several brands, including Iberia and British Airways.  

Investment Rationale for Valuation – Watch at GBX 113.90

• Completion of Share Repurchase Programme: On 9 June 2022, IAG completed a buyback of 0.3% of the Company’s share capital (representing 15,000,000 ordinary shares) to satisfy share awards made under the IAG share-based incentive plans.
• Weak Financials: As passenger revenue surged over five times in Q1 FY22 versus Q1 FY21, loss after tax reduced by 26.7% YoY. Moreover, the operating results are expected to be profitable from Q2 FY22.
• Lack of Conviction: Although losses are expected to shrink with quick revival in demand, staff shortage could lead to flight cancellations. Moreover, global travel industry is still challenging with rising commodity fuel prices and lingering apprehensions regarding Covid-19.
• Economic Slowdown: British economy contracted in April 2022, facing pressure from the rising fuel prices and household energy bills. It is reflecting the intensified cost-of-living crunch. Moreover, the interest rate worries, the US dollar hitting two-decade peaks, and subdued economic forecasts can continue to impact corporate profits and put pressure on equity markets.
• Technical Indicator: The MACD line has given a bearish crossover against the signal line, reflecting a possibility of further price consolidation.

One Year Share Price Chart

 (Source: REFINITIV; Analysis done by Kalkine Group)

Conclusion

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Based on the uncertain macro conditions, negative bottom-line in FY21, and COVID-19 impact, we have given a “WATCH” recommendation on International Consolidated Airlines Group, S.A. at the closing market price of GBX 113.90 (as of 14 June 2022).

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings.

Note 3: ‘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.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.