IAG share price forecast according to The City of London experts

on Apr 5, 2024
  • IAG stock price has jumped to a key resistance level.
  • Analysts at Goldman Sachs, Bernstein, and JPMorgan are bullish on the stock.
  • Technicals point to more upside in the next few weeks.

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The IAG (LON: IAG) share price has done well this year. It has jumped in the past four straight weeks and is hovering near the highest point since November 2021 as investors cheer the company’s outlook. It peaked at 177.85p this week, making it one of the best-performing companies in the FTSE 100 index.

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Strong growth as aviation rebounds

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IAG stock price is thriving as demand for aviation continues rising. The rally accelerated after the company published strong financial results in February. 

These numbers showed that the company’s passenger revenue rose by 32.6% in 2022 to €25.8 billion in 2023. This growth was offset by a sharp decline in cargo revenue, which slumped to €1.15 billion. In all, the company’s revenue rose by 27% to €29.4 billion.

IAG has also become highly profitable, helped by the company’s cost cuts and higher revenues. Its net revenue surged from €431 million in 2022 to €2.65 billion last year. Therefore, the performance of the IAG share price is a sign that investors believe that the company’s growth will accelerate.

There are signs that global travel is still improving this year, with most companies reporting higher load factors. A report by IATA showed that demand rose by 21.5% in February from the same period in 2023. The average load factor rose to 80.6%, continuing a trend that has been continuing for a while.

Still, there is a risk that the company will see elevated fuel risks. The price of Brent jumped to over $91 for the first time in months. The West Texas Intermediate (WTI) jumped to $82, which will lead to higher jet fuel prices.

According to IATA, the average jet fuel price stands at $106 per barrel, a 2.2% decline from the previous week. However, the surge in crude oil prices will likely lead to higher jet fuel cost, which will affect IAG’s costs.

Analysts’ estimates on IAG share price

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Broadly, most analysts are optimistic about the IAG stock price. The most recent estimate came from Bernstein, who reaffirmed its outlook that the stock will jump to 210p. If this happens, it means that it could soar to 23% from the current level.

Goldman Sachs analysts are also optimistic that the shares will continue rising. They expect that the stock will soar to 245p, which is 43% above the current level. JPMorgan analysts also have a bullish view of the stock.

Of the 15 analysts following the company, 11 of them have a buy rating of the stock and the rest have a hold rating.

IAG share price

IAG chart by TradingView

Turning to the weekly chart above, the IAG stock price, we see that it has jumped to a key resistance level at 172.20p. This is a notable level since it has struggled to move above this level since January 2023.

The stock has jumped above the 50-week and 100-week Exponential Moving Averages (EMA). It is also hovering at the 23.6% Fibonacci Retracement level. Therefore, the outlook for the stock is bullish, with the next point to watch being at 225p, the highest swing in March 2021 and the 38.2% retracement point.

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