This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Observations – For
Observations – Against
Share price breakout that opens the door for a recovery to 1997 all time highs. Shares displaying momentum signal, pent up demand being released from a 6-week sideways channel. Oil prices off their highs helps airlines via slightly cheaper fuel costs. Recent traffic data (May) was positive. Potential for bullish flag pattern to see the recent rally from 630-700p repeated, taking the shares to fresh record highs.
Consensus is bullish with 59% of brokers suggesting Buy, with only 7% advocating Sell. Breakout could convince the 34.5% of neutrals to upgrade their ratings now that a major hurdle has been cleared. A 12-month average target of 744p (close to record highs), a median of 803p from June broker updates and 54% of analysts suggesting upside from current levels backs up our objective of a revisiting record highs.
Risks to the IAG share price include, but are not restricted to, disappointing financial results which markets may react to badly, anything that impacts profits forecasts, events that deter people from flying (terrorism), an economic recession, higher oil prices, a bout of aggressive profit taking, corporate difficulties (accounting, legal) and brokers downgrading their rating and/or profit forecasts.
Next Event: June Traffic statistics, 4 Jul; Half-year results, 3 Aug
Latest Broker 12-Month Consensus: 59% Buy, 34% Hold, 7% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 4.8 | 2.0 | 13.4 | 12.5 | 21.0 | 44.0 | 37.5 | 82.0 | 179.5 |
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