The IAG price recovered 15 percent in the last two weeks of the year and the bearish yoke was shaken, a full-blown Christmas rally that discounts an improved outlook for 2022.
Investors opted to strengthen their portfolios for one of the securities hardest hit in the pandemic, precisely in light of the evidence that the wave of contagion caused by the omicron variant will have a fleeting impact on the real economy.
The sources consulted were optimistic with IAG. The group will not be able to save the losses of 3,000 million euros projected for this year, but in 2022 the consensus of analysts of Finanzas.com expects a net profit of 240 million euros.
The ebitda will close to 3,000 million euros and will also enter positive, compared to the red numbers of 1,107 million that experts expect at the end of 2021.
It will be a year in which IAG it will flip your income statement, which should also be reflected in the quote. Rebound potential due to technical and fundamental factors exceeds 40 percent.
Without fear of omicron
With the punishment that the tourism sector has received, and in particular the airlines, perhaps it is daring to say that the market has lost its fear of omicron, but it is the reality.
“The omicron variant has a direct impact on the airlines; despite this, we maintain our recommendation to buy at IAG ”, he said. Pilar Aranda, Bankinter analyst, in statements to Finanzas.com.
“All omicron effects are already discounted by the market,” he added. Francisco Coll, economist and advisor to the World Tourism Forum.
The data “tell us that omicron expansion is high but the disease is not as serious as with other variants, which is boosting IAG and the rest of the tourism sector,” stressed this expert.
For that very reason, Aranda considers that the impact of the omicron strain “will be temporary” and will give way to a reactivation of the economy, thanks in part to mass vaccination programs and the progressive elimination of restrictions.
The joint effect of vaccines, treatments and less severity “improves the prospects that the health crisis will come to an end and return to normal,” he said. Manuel Pinto, XTB analyst.
IAG’s bullish catalysts ready to take off
This more optimistic scenario is what has been discounting IAG with its last bullish momentum. In fact, “the recovery began to be noticed already in the quarter of 2021”, pointed out Iván San Félix, Renta 4 Banco analyst.
In this expert’s opinion, the uncertainty generated by omicron offers a window of opportunity. The main catalysts for the business to take off remain intact: improved health, vaccines and high demand for travel.
It is true that omicron forced the cancellation of thousands of flights, but in Coll’s opinion, the reading has to go beyond the mere data. “If this has happened, it is because reservations were made, which shows that people want to keep flying,” he said. Coll.
So much so that IAG It is already noticing the improvement in demand in some of its divisions. As Iberia said this Wednesday, the Spanish subsidiary closed 2021 operating practically 100 percent of its global network of destinations prior to the pandemic.
The problem for Iberia, in the opinion of Coll, is Latin America, a market where the group has a very high exposure that it could not take advantage of precisely because of the virus. That is why it is important that destinations operate at their maximum capacity.
With these elements in play, the consensus of analysts at finance.com calculates a price target for IAG of 2.45 euros per share, which offers a potential upside of 43 percent.
IAG bounce points to 2.65 euros
Technical analysts are still somewhat more optimistic, estimating that IAG’s rebound could reach higher levels.
“The 2.65 euros per share that IAG marked in June 2020 is an area achievable in the medium term if the situation continues to improve,” he stressed Manuel Pinto.
In the shorter term, the first bullish signal will occur with the break to the upside of 2.1 euros, which will clear the way to attack the resistance at 2.65 euros.
Even more potential sees Jose Luis Herrera, analyst at Global Investment Bank (BIG) in the event that IAG exceeds 2.15 euros.
The breakdown of this level “could take the price to around 3 euros, where the average of 200 sessions passes.”
The general consensus of all the experts consulted is that Iberia’s parent company has already left all the worst behind. “The price has already made a bottom and what we see now is only upward,” he stressed Coll.