The IAG share price continued its strong surge this month, building on a trend that began in October 2022, when it hit a low of 88p. It has jumped by 345% to the current 390p, its highest point since January 2020 and a few points below the all-time high of €440.

British Airways parent company is thriving

The IAG share price is targeting its all-time high after publishing strong financial results last month. Its results reflected the strong demand of its services, even as risks remained at an elevated level. 

IAG, which owns British Airways, Vueling, and Aer Lingus, reported a jump in revenue and profitability. Its revenue rose by 8% in the year’s first half to €15.9 billion. 

The operating profit rose by 43% to €1.87 billion, helped by stable fuel princess, rising revenues, and foreign exchange rates. On forex, the company benefited from the stronger euro, which has jumped by over 10% from its lowest point this year.

There are signs that it will benefit from the falling jet fuel prices. IATA data shows that the average jet fuel price dropped by 2% last week to $86.35. This decline may continue as crude oil prices plunge.

IAG’s profit after tax improved to €1.3 billion from €905 million in the same period last year. 

Most importantly, despite returning funds to investors, its balance sheet improved, with the borrowings plunging to €14.8 billion from the previous €17.3 billion. Analysts expect its net debt to fall to €3.1 billion by 2027

IAG stock price has soared because these numbers were better than expected. Investors had anticipated that the trade war between the US and other countries would negatively impact its business, but this did not materialize.

Read more: IAG share price forecast as transatlantic demand starts to recover

Fuel costs are falling

The stock has also soared because the company reduced the non-uel unit costs by about 3%, which is lower than the previous guidance of 4%. 

IAG share price has also jumped because of the continued shareholder returns, which will total about €1.5 billion this year. It has a dividend yield of 1.97% and has continued to reduce its outstanding shares to 4.85 billion from the pandemic high of nearly 5 billion. 

The IAG stock price has also benefited from its reasonable valuation despite its strong surge. It trades at a 6.7x forward earnings for this year and 6.2x in 2026. 

IAG has also benefited from the diversity of its offerings, which include popular airlines like British Airways and Aer Lingus.

IAG share price technical analysis

IAG stock chart | Source: TradingView

The weekly chart shows that the IAG stock price has been in a strong bull run in the past few years. It formed a morning star candlestick pattern in April, triggering more gains in the past few months. 

The stock recently crossed the important resistance level at $362, its highest point in February. By moving above that level, the stock invalidated the double-top pattern that was forming.

IAG share price has remained above the 50-week and 25-week moving averages. The Average Directional Index (ADX) has jumped to 34, a sign that the momentum is gaining strength.

Similarly, the Relative Strength Index has moved to the overbought level of 70. Therefore, the stock will likely keep rising as bulls target the all-time high of 440p. 

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