IAG share price is at crossroads ahead of Q2 earnings

The International Consolidated Airlines Group (LON: IAG) share price has moved sideways in the past few weeks even as the civil aviation industry recovers. The stock is loitering at ~160, which is lower than the year-to-date high of 174.20.

US airlines earnings

Most international airlines have published strong financial results in the past few months. Last week, Delta Air Lines released encouraging results, helped by the robust transatlantic segment of its business. Its revenue surged to over $14.6 billion in the second quarter leading to a profit of over $1.8 billion. As we wrote here, the management hinted that the business was seeing strong forward bookings.

Similarly, American Airlines Group said that its revenue came in at over $13.7 billion Q2 while its earnings per share jumped to $1.59. The firm cited the strength of its domestic and international business.

Other global airlines like Qantas, Cathay Pacific, and Emirates have published strong financial results. At the same time, IATA believes that airline revenue will surge to over $800 billion this year, with many companies operating above pre-pandemic levels. In a note, analysts at Susquehanna said:

“We view 2024 as a more normalized operating environment for the airlines, though near-term do see growing risk of an economic downturn and delays in aircraft deliveries.”

Therefore, I believe that IAG will also publish strong results on July 29th. That’s because IAG has a lot of similarities with companies like Delta and American. For one, its British Airways brand makes most of its money in the transatlantic division. 

In addition to its long-haul business, IAG has a major market share in domestic and regional industry. It does this through its other businesses like Aer Lingus, Iberia, and Vueling. Analysts expect that AIG’s operating earnings pre-exceptional items will come in at over 829 million euros.

IAG share price forecast

IAG chart by TradingView

My last prediction of the IAG stock price was accurate. At the time, I predicted that the shares would have a bearish breakout because of the rising wedge pattern. The stock retreated and reached a low of 153.10p.

On the daily chart, the stock has moved below the lower side of the rising wedge pattern. It has also dropped below the 50-period moving average. The Negative Volume Index (NVI) has risen and is above the moving average.

Therefore, the outlook of the stock is neutral with a bearish bias because of the rising wedge pattern. If this happens, the next level to watch will be the psychological point at 145p. The stop-loss of this trade is at 162p.