Here’s why the IAG share price just popped

By:
on Apr 18, 2024
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  • IAG’s stock price has soared sharply in the past two days.
  • Delta and EasyJet published strong financial results.
  • These results sent a positive sentiment about the aviation industry.

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IAG (LON: IAG) share price went vertical this week, erasing some of the losses it made earlier this month. It has risen for two straight days and moved to its highest point since April 12th. It is up by over 7% from its lowest point last week.

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Strong EasyJet earnings

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IAG, the parent company of British Airways, Vueling, Aer Lingus, and Iberia, has bounced back in the past few days. The recovery accelerated on Thursday after EasyJet, a low-cost airline, published encouraging financial results.

EasyJet said that its passenger numbers increased by 8% in the first half of the financial year. It also reduced its winter loss by about £50 million, bringing the loss before tax to between £340 million and £360 million.

The company expects that its business will continue doing well this year. It noted that summer bookings and pricing were doing well. The management believes that EasyJet will continue being the fastest-growing airline in the region.

EasyJet and IAG are significantly different companies. For one, IAG operates several brands that target different types of companies. EasyJet, on the other hand, is a simpler brand that has a close resemblance to Ryanair.

However, its financial results mean that there is a possibility that the aviation industry is still doing well. IAG will release its financial results on May 10th. Its most recent annual figures showed that it made a record profit in 2023 as demand rose. Its total profit after tax stood at over 2.65 billion euros.

EasyJet’s earnings came a week after Delta published strong financial results. It earnings came in at $380 million, an improvement from the previous $217 million. Revenue rose by 6% to $12.6 billion. 

Liberum is upbeat on IAG stock

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IAG share price also recovered after a positive note by analysts at Liberum Capital. In a statement, they boosted their outlook for IAG, EasyJet, and Ryanair citing strong tailwinds like pricing and volume.

The statement came a day after Lufthansa, a large German airline issued a profit warning. Analysts believe that IAG is not exposed to the challenges that Lufthansa said like strikes and slower ramp-up capacity. 

Further, IAG shares have jumped because of the improving conditions in the energy markets. The price of Brent and West Texas Intermediate (WTI) has dropped to $86.7 and $82 a barrel. If this trend continues, it means that the company will spend lower amounts on jet fuel.

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