Investing 03-01-2023 12:09 21 Views

IAG share price forecast for 2023: Is British Airways parent a buy?

IAG (LON: IAG) share price had a difficult performance in 2022 even as the aviation industry staged a strong recovery during the year. The stock ended the year at 130p, which was about 30% from its highest level during the year and about 73% from its highest point in 2020. So, how will the stock trade in 2023?

IAG outlook for 2023

IAG is a leading aviation company that operates some of the popular airlines in the world like British Airways and Aer Lingus. The company makes most of its money from British Airways, which is one of the best-known companies in the industry. 

IAG business did well in 2022 despite rising challenges such as limitations in Heathrow Airport that led to thousands of flight cancelations. The company’s international business also recovered at a slower pace than expected because of its exposure to China, which implemented strict Covid-zero strategies. 

The most recent results showed that the company’s passenger revenues soared to €14 billion in the nine months to September. Its revenue was about €3.1 billion in the same period in 2021. Its total revenue surged from €4.9 billion to over €16.6 billion. It also moved from a loss of over €2.6 billion to a profit of more than €199 million. 

The company’s other metrics were strong. For example, its operating profit rose to more than €1.2 billion while its total liquidity jumped to over €13 billion. All its airlines were profitable during the period. Therefore, with jet fuel prices falling and demand expected to rise, the company will continue doing well in 2023. The firm expects that its operating profit will be €1.1 billion. 

IAG share price has dropped as worries of weaker demand amid inflationary concerns increased. Still, I don’t expect that a recession will temper the rising demand as countries reopen their borders. 

IAG share price forecast 

IAG chart by TradingView

The daily chart shows that the  IAG stock price has been in a bullish trend in the past few months. It has managed to move above the 50-day and 100-day moving averages. The shares have also formed an inverted head and shoulders pattern, which is usually a bullish signal. 

Therefore, there is a likelihood that the stock will continue rising in 2023, with the next key level to watch being at 170p, which is about 30% above the current level. A drop below the support at 115p will invalidate the bullish view. 

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