IAG full-year results: where next for the share price?

International Consolidated Airlines Group (IAG) will unveil its full-year results on Friday, though investors have been warned ahead of its latest earnings by Berenberg that the company could suffer a ‘substantial hit’ as a result of the coronavirus.

Analysts from the Hamburg-based bank said that IAG and the wider transport and logistics sector have already been financially impacted by the outbreak over the first three months of 2020, with its impact likely to increase into the second quarter.

‘We know that the disruption to travel and supply chain will be significant in the first quarter, but if the effects start to spill over into the second quarter and beyond, we think that the impacts - and the share price reactions - are likely to be more substantial,’ Berenberg said in a note.

‘We expect the first quarter to be weak across much of the broader sector. Should the virus spread beyond China in a substantial way, the effects could become far more wide-ranging in ways we have no yet quantified or reflected in in our numbers.’

IAG: technical analysis

IAG shares have fallen sharply as the spread of the coronavirus hits risk appetite. But having already gained almost 50% since the summer lows (and having surged 75% from the June low to the January peak) the shares looked primed for a pullback, according to Chris Beauchamp, chief market analyst at IG.

The uptrend from June had seen little in the way of a pullback until January, when the price dropped from 680p to 560p. A brief recovery created a lower high at 640p, and for now the 560p area is holding once again.

Further losses target 520p and then 510p, while for the time being traders will wait to see the gap closed at 620p before becoming more optimistic on the near-term outlook. A longer-term recovery targets the peak at 680p, as the post-2009 uptrend continues.