The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
“Newtothis” I think it’s fair to say with the age of the internet that a lot of people are much more savior and using comparison sites to book their tickets. The age of sticking to a brand you know has fast dwindled away with so much choice
I don’t really get all of this however the one thing I don’t get is why they are looking to acquire another airline as part of the group, surly it would make sense to pay down the debt.
Shares in International Consolidated Airlines Group, known as IAG, the FTSE 100 stable of carriers whose largest constituent is British Airways, have over the past year traded in a fairly narrow band between 135p and 170p. Currently changing hands at 156p, IAG stock is flat on where it was a year ago.
It is by a long way the poorest performer of the UK-centric airlines. Shares in easyJet are up 14 per cent over the past 12 months. Ryanair stock has gone up 36 per cent.
But these two European short-haul airlines with lower-cost business models than the legacy carriers, which they have successfully disrupted, are in favour with investors, who see the easy gains in a capacity-constrained European market that is still enjoying good demand. Ryanair and easyJet are the wrong comparators for IAG, which comprises BA, Iberia, Aer Lingus and Vueling. Between them the four airlines fly to five continents and are especially embedded on routes over the Atlantic.
IAG is one of Europe’s big three aviation conglomerates. Lufthansa, the German group that also controls the flag carriers of Switzerland, Austria, Belgium and soon Italy, has seen its shares dive 25 per cent over the past year. The Franco-Dutch combine Air France-KLM has witnessed a 32 per cent fall in its stock. Against these two, IAG is positively flying.
On Thursday IAG will report its financial results for 2023. They are expected to show pre-tax profits of about €2.9 billion on revenues of more than €29 billion. This is for a company that is valued on the London stock market at £7.6 billion.
This means its likely earnings per share for the year will come out at about 37p, meaning the shares currently trade at not much more than four times earnings.
Against any historical benchmark or even industry comparison — and yes, we are talking about the capricious and inconstant airline game — IAG’s stock market rating is very low.
Of course IAG could announce a downbeat assessment for the year ahead but if it had seen anything materially negative it would have been bound to disclose it before its results. And in any case, the City appears to be already bidding to the upside, with the stock price having appreciated 10 per cent over the past fortnight. Long-suffering IAG followers may have a simple explanation for the company’s lowly rating: investors long ago lost faith in a business that seemed so capable of so regularly shooting itself in the foot.
Yet the current management team is way more professional than that which ran IAG for much of the first ten years of its creation during which customer relations plummeted.
The new crowd, of course, have struggled to show the fruits of their approach against the backdrop of the pandemic travel restrictions and changed travel habits, especially on long-haul.
But if the current management team is to be believed, there is much to come: profit margins of up to 15 per cent, when 10 per cent used to be regarded as a good effort; a doubling
God o mighty would you all put a sock in it and talk about the business rather than who’s bullying who. If you want childlines number just google it, there’s plenty of frustrations with the share price, the last thing we need is arguing over who’s bullying who.
To be fair I get the frustration. I’ve held here for ages and it seems we only move slightly and then back down again. It is frustrating but I do genuinely think this will fly at some point, now the question is when is that “some point”, well is we knew that we would manage our shares in a better way. I’m going to stay and refuse to leave before 200. GLA
I read this earlier and was thinking to myself who’s actually asking the question about £4.50 and then halfway through I stopped reading it because I didn’t see the point in this pointless article. I’m thinking about doing writing an article on “what could be in the kings speech next year” 🙄🙄🙄🙄🙄