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Absolutely. I’ve said before I was expecting an overshoot (happened last week), there was significant inertia pushing this North with hopes of wider summer travel which is now looking less certain. The airlines are starting to gear themselves around summer 2022 now, this year isn’t exactly written off but it’s likely going to be a grab what you can scenario like summer last year, while the government tip toes around with their ridiculous quarantine free travel list that they change 16 times a day.
I'll maintain that a year end of 210p should be a fairly safe bet and 230p by the 2022 end, this is what I'd consider erring on the side of caution, so yes at this level it's a fairly reasonable time to buy, I do believe this was overvalued when it was at 220p+ recently though and there was a correction due.
What are everyones thoughts on any potential targeted aid for the sector in the budget? I anticipated the stamp duty extension which looks like the market has caught on to given the movement today which is obviously fairly major for that sector, there has been a similar scale increase in the majority of airline shares but I haven't seen anything specific to justify this over the weekend?
Keen to know everyones thoughts....
Sorry just an oversight on previous post I noticed, previous top mCap was actually just over 14bn not 21, I accidentally calculated 3/2 RI rather than 2/3, an odd mistake considering I was holding at the time it happened! Either way, lovely tick up for everyone today, my money from here is currently in oil but if I was in here I might be tempted to sell now and look for a re-entry on Friday after the results (there will probably be a slight overshoot on the downside), to gain a few extra shares for the long run.
MisterA, welcome to the board.
Firstly regarding your strategy, a wise move. There's a large number of reasonably low risk shares in the FTSE100 right now that will see a comfortable return North of 20% in the next 12 months, I do believe IAG has the potential to be (and will likely be) one of them.
Regarding valuation, IAG's all time mCap high was about 21bn, pre pandemic IAG was trading in a range of about £2.60-£3.60 (adjusted for RI) at which point they were obviously in a far better financial position and still paying a dividend. Current mCap is about 8.4bn, this is probably a fair price today given losses this FY and outlook for the next 12 months.
The sad situation for the aviation sector at the moment is that it's going to require a decent amount of vaccinations on a global scale, if you look at how badly countries like Canada have got it wrong regarding vaccines it will give you a good idea of some of the potential hurdles that are ahead for a 2021 recovery.
IAG are obviously acutely aware of this and do seem to be gearing themselves up for a bit more of a disappointing summer than perhaps they would have expected 6-9 months ago. I'll give you my SP prediction as it stands today, personally I think there's are a bit of a waste of time as it's so dynamic but here it is anyway (it'll probably change shortly after 3pm lol).
Dec 2021 - £2.10
Dec 2022 - £2.30
Dec 2023 - £2.50+
Although these estimates are considerably more conservative that a lot on this board, that is still around a 50% return over a 3 year period.
March 3rd is the date I’m interested in. Results obviously aren’t going to look great, international travel as far as Bojo is concerned has always seemed to be a low priority. There’s been hints from cabinet members of domestic summer travel but not a lot else.
My personal opinion is by the time they have it figured out a huge number of potential forward bookings will have been lost anyway, the best hope is that there’s something opened quarantine free between the U.K./US which they may find justifiable due to both countries vaccine programmes.
March 3rd on the other hand, broader support for the so far neglected travel sector perhaps? Who knows, certainly a tricky guess for IAG, obviously a huge contributor to the U.K. economy but still a Spanish company.
Going to be interesting to keep an eye on this one...
https://www.israel21c.org/has-israel-just-found-the-cure-for-covid/
I think we might see £2-2.20 by the end of the year, it’s looking increasingly unlikely that there’s going to be major summer travel this year, things will hopefully have opened up by then but by the time they do a lot of forward bookings will probably have been lost. IAG have shown they have access to the finances to ride it out, but it will take them years to recover these losses,l. Still good growth potential for a long term hold though.
Many thanks, I was toying with buying back in for quite some time today and left it so late (16:29) I made it onto the recent share trades page....Decision mostly driven by lack of reaction to vaccine news, and general lacking behind the index this week so hoping the suppression finds an end next week.
Had quite the ride over at BP this week but have decided to come back in here over the weekend as I can see a potential retrace over there next week (might have got it massively wrong though). Anyway got out at 298.82 and in here at 156.21 with a target of about 164p, enjoy your weekends all.