Wednesday, January 26

IAG parks the recovery until 2023 due to omicron

IAG shares fell more than 5 percent and lost the psychological support of 1.5 euros.

Just when the brokers had regained some optimism with the Iberia parent company, the new restrictions imposed by the omicron variant brought down the listed companies in the tourism sector again.

The index Stoxx Travel and Leisure fell as much as 3.4% on Monday, the biggest decline since concerns about the new strain emerged last month.

Trip cancellations and new mobility restrictions, especially lockdown in the Netherlands, depressed airlines, leaving airlines IAG, Lufthansa The Wizz Air with cuts around 5 percent.

Restrictions hold back IAG and the rest of the airlines

Blockades and confinements are never good news for this sector, the most affected by the pandemic. The problem is what is known about the restrictions, and what is to come.

Thus, the Secretary of Health of the United Kingdom, Sajid Javid, He refused to rule out stricter measures before Christmas to contain the omicron expansion. Some projections speak of up to two million infections a day.

France It is also considering taking additional measures, and Germany has banned the vast majority of travelers from the United Kingdom.

In this sense, France temporarily barred many Brits from entry last week, and Cyprus will require UK visitors aged 12 and over, regardless of vaccination status, to quarantine.

Even Spain, with high vaccination rates, will discuss this Wednesday possible restrictive measures to stop omicron.

Difficult start of the year for IAG

With this outlook, the last two weeks of the year and the start of the next financial year are especially difficult for IAG.

“The increase in Covid-19 cases and the uncertainty about the omicron variant have affected the recovery of IAG,” said analysts from Bloomberg Intelligence

“We expect a difficult start to 2022, with sales and margins not approaching pre-pandemic levels until at least 2023,” added these experts.

“It was expected that IAG would return to benefits in 2023 if the return was normal from the vaccines, but now again restrictions will delay that date,” he agreed Sergio Avila, IG analyst.

It is true that the market celebrated the group’s reversal in the purchase of Air Europa, but the positive effect on the stock market barely lasted a couple of sessions.

“Investors have backed off in an environment where omicron has appeared and in which there have been many cancellations for this Christmas,” he said. Jose Lizán, manager Royal Magnum Sicav, at market closing podcast from

“The bad behavior is due more to this than to the fact of having withdrawn from the purchase of Air Europa, which is a prudent operation,” stressed this expert.

IAG points to falls to levels of 1 euro

Following recent declines, the technical outlook for IAG They are worrying again and the threat of further setbacks is on the horizon.

“The value has us accustomed to high volatility, since it moves to the sound of the news that we are learning about the coronavirus,” he said Jose Luis Herrera, Analyst at Global Investment Bank (BIG).

Technically, a few days ago it has closed the downward gap that it left in the session of November 26, slightly exceeding 1.7 euros.

Since then, it has returned to a very short-term downward path, to the point that this Monday’s session is calling into question the previous minimum, 1.48 euros. This is the imminent short-term support the stock is facing.

If he managed to respect this area, or even fell back to 1.45 euros at most, “there could be possibilities of seeing a return” to the upside, he recalled. Herrera.

The problem is if you lose this reference, which right now seems like the last handle for action. In case of losing this area, the sources consulted pointed out that IAG could head towards the area of ​​1-1.2 euros. For Ávila, the most likely scenario in case of losing 1.44 euros is the return to 1.21 euros.