RE: Crazy.16 Jun 2022 21:00
"Despite the risks mentioned above, I do feel that the end of the fall could come soon. For example, the market capitalisation can’t get too disconnected from the actual value of the company.
Currently, the market capitalisation of International Consolidated Airlines Group is £6.21bn. But the enterprise value stands at £16.15bn. The enterprise value measures the worth of a business, including cash and debt. It should work out to be similar to the market capitalisation of the firm. The clear disparity with the IAG share price indicates to me that the shares are possibly trading too low. Therefore, I’d expect any continuation of a fall to be limited.
I think the share price could stop falling later this summer when I consider the release of Q2 results at the end of July. Given the lack of operating restrictions due to Covid-19 and the consumer demand, I’d expect a positive surprise when the results come out. The number of flying hours and capacity should show signs of getting back to pre-pandemic levels. This could spark a move higher for the stock."