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Highlights
- FTSE100 listed, IAG Group shares are up by over 23% since the start of the year, led by several positive triggers.
- The share price is still not close enough to the pre-pandemic levels when it was above GBX 400 levels in January 2020.
The FTSE100 listed diversified airlines group, International Consolidated Airlines Group (LON: IAG), which owns British Airways and other airline companies, have been on the investor radar in 2022. The company’s stock is up by over 23% since the start of the new year, led by several positive triggers.
The recent buying interest in the stock shows optimistic investor sentiments. It indicates that the passenger carrier’s worst phase is behind, and the company is poised to improve its business performance in upcoming quarters. Let us look at different factors that are aiding the share price of the company:
- One of the most obvious business revival signs is the ease in the Covid-19 related restrictions following a drop in the Omicron variant cases in different countries. In the UK, travel restrictions will completely be eased from 11 February. Fully vaccinated travellers coming to the UK will not need to take any Covid related tests. The development is going to be fruitful for the entire airline industry.
- An earlier announcement that a mandatory Covid-19 test would no longer be required resulted in a significant jump in flights bookings as per the new research by travel trends firm ForwardKeys. The flight bookings were close to the pre-pandemic levels amid a rise in travel demand. Higher trip bookings, especially on long-distance flights, are beneficial for the business as they tend to be more profitable with fully functional operations.
- IAG Group being a holding company of several famous airlines has a well-diversified operation. The diversification benefits the company to recover its operations faster as it can quickly ramp up its operation compared to other airlines and will be at an advantage among its peers.
Does the stock have the potential to rise further?
The recent rise in the company’s stock price has been heartening for investors. The share price is still not close to the pre-pandemic levels when it was above GBX 400 levels in January 2020. Hence, if the above-mentioned positive triggers remain unhindered, they can go in favour of the company, helping the stock prices to rebound further with scope to reach the previously achieved levels. Also, the stock best fits the travel-related recovery theme.
Recent business updates and stock performance
In the nine months to 30 September 2022, the company reported total revenue of €4,921 million, a drop of 24.4% as the business faced lockdown-related travel restrictions. The company is confident of growth revival and passenger capacity rise in the upcoming quarters.
(Image Source: Refinitiv)
The IAG Group currently trades at GBX 179.28, up by 2.47% on 10 February 2022 at 12:30 pm GMT+1, with a market cap of £8,682 million. In the last one year, the stock has given a 16.61% return to its shareholders.
