Picture supply: Worldwide Airways Group
April was a reasonably quiet month for Worldwide Consolidated Airline Group (LSE:IAG) shares. After the discharge of the 2023 outcomes again in February, traders had little to chew over in April. But up forward in Could we have now the Q1 outcomes, together with another key occasions that might affect the IAG share worth way more. Right here’s the lowdown.
Upcoming earnings
The large occasion to plan for is the Q1 outcomes, due out on 10 Could. The important thing factor I’m watching out for is affirmation that the momentum from 2023 continues to be being carried over. Within the full-year outcomes, revenue earlier than tax surged to only over €3bn, the best stage since earlier than the pandemic hit in 2020.
To me, this confirmed that the enterprise is now again firing on all cylinders and has put the woes of the pandemic behind it. For 2024, the report famous that “demand continues to be strong”. Additional, the agency was “92% booked for Q1 2024 and 62% booked for H1 2024”.
This strains up 2024 to be a robust 12 months, however traders will likely be eager to see if the Q1 outcomes again this up. One concern is that if customers are feeling the pinch with the cost-of-living disaster nonetheless lingering. Ought to demand fall based mostly on this, it may trigger the IAG share worth to have a wobble.
Danger within the Center East
One other ongoing state of affairs to be careful for is the battle within the Center East. Could might be a crunch month, with requires a stop hearth to forestall additional escalation.
This impacts IAG, as a result of the agency flies to completely different areas within the Center East, each for business and cargo functions. Though it hasn’t acknowledged any affect so far, there are indicators that it might be hampering enterprise. For instance, I famous current figures out from competitor easyJet.
A few weeks again, easyJet reported £40m value of cancellations and £40m value of misplaced bookings for flights to the area.
We’ll have to attend and see how issues play out over the subsequent couple of weeks. But it clearly has the potential to affect IAG shares.
An undervalued inventory for the watchlist
Once I look previous the subsequent month, I see good potential for the inventory to maneuver greater in coming years. In fact, that is depending on efficiently navigating the occasions in Could! But if we assume that it’s all constructive, I’d undoubtedly think about including the inventory to my portfolio.
I really feel some traders are nonetheless ignoring the inventory as they really feel it’s nonetheless caught underneath the pandemic cloud. Latest outcomes present that’s clearly not the case. But with a price-to-earnings ratio of simply 4, it’s undervalued in my e book.
The chance is that it stays undervalued for a very long time, as traders might be sluggish to vary their view on an organization. But as we noticed with Rolls-Royce over the previous 12 months, as soon as an undervalued inventory begins to rally, it could actually surge.
