IAG provides passenger and cargo transportation services all over the world and operates a fleet of 600 aircraft under names like Iberia, Aer Lingus, or British Airways. Strongly affected by the pandemic, the airline industry suffered its worst decline ever. As such, IAG’s share price declined in 2020 in line with the industry, only recovering in the last few months. Year-to-date, its shares are down -3.56%.
When Does IAG Report Q4 Earnings?
IAG reports the 2020 full-year results and the 26th of February.
Market Expectations from IAG’s Earnings Statement?
The market expects a further decline in EPS of about -$6.42 on the back of a depressed industry due to traveling restrictions caused by the pandemic. Any positive surprise should be enough to trigger a market reaction especially considering the fact that IAG’s technical pictures look like a bottoming pattern may be in place.
IAG Shares: Technical Analysis
The technical perspective improved significantly in the last period. We see the dramatic drop in price in April 2020 when the world literally shut down due to the pandemic, and then a consolidation around those levels.
What is interesting is that the market made a new lower low and then bounced back – this usually happens in an inverted head and shoulders pattern. The pattern looks even more compelling because of a double bottom forming during the “head” of the pattern, reinforcing the reversal potential.
On a positive earnings surprise, the next resistance level is the neckline of the inverted head and shoulders pattern. A break and close above the neckline will trigger some interest toward the measured move, calculated as the distance from the head to the neckline, projected from the neckline.
On the flip side, a negative earnings surprise may lead to the price retesting the lows. If the market moves below the double bottom, the reversal pattern gets invalidated.
What Is the Outlook for the IAG Share Price?
The industry is still battered from the pandemic, but hope does exist. As the vaccination efforts increase throughout the advanced economies, the hope is that the airline industry will bounce back together with the world’s economies.
However, there is a long road ahead, especially considering the fact that the European economies are still in lockdown mode. In fact, the European bookings have declined in January. Also, the price of oil reached $60 today, putting further pressure on the troubled airline industry.