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 Might we have now the Q1 outcomes, together with another key occasions that would affect the IAG share worth far more. Right here’s the lowdown.
Upcoming earnings
The large occasion to plan for is the Q1 outcomes, due out on 10 Might. 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 very 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 robust”. Additional, the agency was “92% booked for Q1 2024 and 62% booked for H1 2024”.
This traces up 2024 to be a robust yr, however traders will probably 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 primarily based on this, it may trigger the IAG share worth to have a wobble.
Threat within the Center East
One other ongoing scenario to be careful for is the battle within the Center East. Might might be a crunch month, with requires a stop fireplace to forestall additional escalation.
This impacts IAG, as a result of the agency flies to completely different places within the Center East, each for industrial and cargo functions. Though it hasn’t acknowledged any affect to this point, 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 price of cancellations and £40m price 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
After I look previous the subsequent month, I see good potential for the inventory to maneuver increased in coming years. In fact, that is depending on efficiently navigating the occasions in Might! But if we assume that it’s all constructive, I’d positively take into account including the inventory to my portfolio.
I really feel some traders are nonetheless ignoring the inventory as they really feel it’s nonetheless caught below the pandemic cloud. Current outcomes present that’s clearly not the case. But with a price-to-earnings ratio of simply 4, it’s undervalued in my guide.
The chance is that it stays undervalued for a very long time, as traders may be gradual to vary their view on an organization. But as we noticed with Rolls-Royce over the previous yr, as soon as an undervalued inventory begins to rally, it could actually surge.