The IAG share price is up by 33 per cent in the past month, pointing to a sustained recovery amidst rumours that it could be buying one of its main competitors, EasyJet. The current bullish push also comes at a time when the company is slowly returning to profitability.
According to data from its third quarter, the company made €1.21 billion in operating profit. This was a significant improvement from its €452 million loss during the same period last year. The operating profit announcement for the third quarter also met most analysts’ projections.
Its revenues also pointed to a full recovery, with the company returning to its pre-pandemic levels. According to the Q3 financial report, IAG reported a revenue growth of €7.3 billion, a 0.9 per cent increase from the third quarter of 2019 before the pandemic hit. The IAG growth also came at a time when the company has faced numerous issues, including strikes from some of the airports it operates from.
The current return to profitability can also be extended with data showing that despite seeing a significant increase in the number of passengers year-over-year, its capacity for the Q3 was still 80 per cent of what it did in Q3 2019.
IAG Share Price
On the fundamental side of things, the IAG share price is looking very positive to buy. The news of a possible takeover of one of its main competitors has also augured well with investors, which has seen its price spike in the past few weeks.
Looking at the chart below, the price action still signals a bullish push despite the company’s share price falling by 14 per cent from the price high of the past 72 hours. Therefore, I expect the price to return to the price high of 141p in the next few trading sessions. However, a trade below 115p will invalidate my bullish analysis.
IAG Daily Chart
