The temperatures are starting to drop, it’s getting dark earlier and as a Stark would say, winter is comingNext weekend will put the finishing touches to the summer, but even with the summer season over, IAG is flying high on the stock market now. And there are already nine analysts who see the airline’s shares at 3 euros or more.
The latest to join this group was the Banco Sabadell analysis team, this Monday. “Since the second quarter results, the stock has experienced significant outperformance (+20% against Ibex and +22% against Lufthansa and Air France) supported by the operational evolution of the quarter (prices up, despite the increase in capacity), the return to the dividend and the renunciation of the acquisition of Air Europa. Despite this, if we look at the medium-term behavior, it is still far from positive and. continues to be one of the airlines offering the biggest discount on electric vehicles before the pandemic (-20% vs 2019 and vs 0/+20% on average in comparable) even if it is the company which shows the best operational evolution, a good financial situation and a better positioning”, they explain from the financial entity.
After Air Europa’s resignation, Banco Sabadell considers the rest of the potential acquisitions as one of the catalysts that the company could have: “With a clear horizon, we are analyzing the possible participation of IAG in the privatization process of TAP Portugal. everything is progressing as rumor has it, this month the Portuguese government is expected to resume the process (it had already tried a year ago) after saving it due to the pandemic. Now, IAG would be better placed to face this process, since it is not immersed in any integration/restructuring operation and because, in addition, we believe that it could obtain approval from the European Commission with fewer reservations than the others due to fewer overlaps in the network”.
In total, and taking into account the good performance recorded in recent months by the airline’s shares, the analysts of the Catalan bank raise their price target to 3 euros per share and reiterate their recommendation to buy IAG on the stock market. With this valuation, there are now up to nine analysis teams that see the airline’s shares at this price or higher, with Panmure Liberum being the highest valuation, estimating the company’s price at 5.27 euros per share, if reached it would mean the company’s price. definitive return to pre-pandemic levels. IAG has not been listed at 3 euros per share since March 2020, in full decline due to the Covid outbreak.
For now, These 3 euros imply an increase potential for the company of 26%. for the following months, this would add to the increase of more than 33% accumulated in the stock since the beginning of the year. If the year ends now, it would be its most bullish stock market year since 2017. Only in the sessions accumulated in September (it only closed negative on the first day of that month and had nine consecutive sessions in positive), the British Hispanic firm advances by just over 9% and places its price at the levels of June 2021.
In addition to the good results that the company is recording throughout the year, the recent drop in oil prices has been another of the accelerators of the increases. For the first time since 2021, the barrel of Brent was seen below 70 dollars per barrel last week and leaves price losses of more than 7% in 2024. Although now the commodity returns to 71 dollars per barrel, nothing makes the market think that prices will rise much more and, in fact, there are experts like Citi analysts who They predict that European crude oil will even be below $60 a barrel next year.
