IAG Share Price Retains Upside Potential Despite Slump. Time to Buy?

The IAG share price has pared some of the day’s initial losses but still trades 0.79% lower. Tuesday’s modest slump has erased all gains made on Monday and comes as the company’s shareholders are said to be critical of the proposed compensation plans for company executives.

The International Consolidated Airlines Group (IAG) executives will receive higher share awards despite the company’s significant losses during the COVID-19 pandemic. 

Glass Lewis, an investment advisory firm, is said to be championing a vote against the pay policy during the annual general meeting in June. Other advisers could assume a similar stance in swaying shareholders against the plan. 

The news has dampened sentiment on the stock, but not by much. The price is still finding support from the company’s agreement to purchase as many as 150 Boeing 737 aircraft. Recall that in our last update, it was mentioned that IAG was planning to buy 50 of these aircraft, with a clause that allowed it to add 100 extra aircraft in a deal worth $6.25 billion.

The IAG share price target is expected to average 185p, according to forecasts by institutional analysts. This price target gives the stock an upside potential of 46.82%, keeping it in line with the company’s forward guidance of a bounce back to profitability in the 2nd quarter as pent-up demand for business and holiday travel increases.

IAG Share Price Forecast

The 124.48 pence mark has proven to support the price action’s current support. To become attainable, a bounce on this level needs to breach the 130.00 psychological resistance for the 136.64 resistance barrier (15 September 2021 low and 3 December 2021 high). Additional resistance targets to the north are seen at 143.94 (31 December 2021 and 22 March 2022 highs) and 149.72 (29 March and 4 May highs). 154.78 is yet another target to the north that remains a bit far off.

On the flip side, a decline below the support gives the bears clear seas to sail towards 110.26 (7 March low). Below this level, additional downside targets are 102.68 (3 August 2020 low and former neckline of 25 September 2020/2 November 2020 double bottom) and 88.92 (double bottom and 2 November 2020 low). A break of 110.26 also breaks down the channel’s lower border, opening the door to the lower price targets.

IAG: Daily Chart