Coronavirus crash: IAG share price marches lower amid flight cancellations
Over the last eight trading sessions, shares in IAG have fallen by more than 25% as the coronavirus outbreak worsens, forcing UK airlines to cancel flights across Europe.
International Consolidated Airlines Group (IAG) shares have fallen by more than a quarter over the last eight trading sessions – wiping off over £15 billion in value from the stock – as the COVID-19 outbreak worsens, forcing UK airlines to cancel flights.
In fact, the British Airways-owner and its rival Ryanair said that it will cancel hundreds of flights, particularly Italian short-haul trips throughout March and April, due to the coronavirus impacting consumer demand.
IAG is trading at 455p a share as of 13:10 (GMT) on Tuesday.
Looking to trade IAG and other UK stocks? Open a live or demo account with IG today.
Berenberg lowers IAG target price amid COVID-19 outbreak
Analysts from Berenberg reiterated their ‘buy’ rating for IAG but opted to lower their target price for the stock from £7 to £6.20 a share due to concerns over the coronavirus threat and its impact on the travel industry.
‘Management noted that Asia Pacific demand appears to be slowly stabilising. IAG has redeployed some capacity elsewhere but it is cautious about making deeper cuts,’ Berenberg said in a note.
‘More immediately, near-term Europe bookings have weakened quickly and unevenly,’ analysts from the Hamburg-based bank added. ‘Italy has destabilised as both corporate and leisure customers cancel trips. However, other markets were holding up at the time of Friday's Q4 release, including Tenerife, the site of a high-profile coronavirus outbreak.’
However, analysts from the German bank still think IAG is capable of generating ‘sustainable outer-year returns above its peers’ based on its M&A activities and an ‘opportunistic 737 MAX fleet renewal’.
Based on the stock trading at 455p a share, analysts from Berenberg believe the stock has a potential upside of 36%.
You can go long or short IAG with IG using derivatives like CFDs and spread bets.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
