IAG Shares: £10,000 Investment Two Years Ago Now Worth…

International Consolidated Airlines Group (IAG), the parent company of British Airways, Aer Lingus, and Vueling, has shown remarkable resilience over the past two years. Since January 19, 2024, IAG shares have surged by 182.1%, positioning it as the eighth-largest riser on the FTSE 100 index. An investment of £10,000 made on that date would now be valued at approximately £19,040.

IAG Shares and COVID-19 Recovery

The pandemic had devastating effects on the airline industry. However, IAG has effectively recovered, reinstating dividends during this growth phase, which has contributed to increased total returns for shareholders.

Valuation Insights

IAG shares currently present an attractive investment opportunity, with their price-to-earnings (P/E) ratio at around eight times annual earnings. This low valuation indicates robust profitability relative to share price. In comparison, rival airline easyJet also exhibits a similar P/E ratio, suggesting broader sector challenges potentially stemming from lingering investor apprehension about international travel.

• The threat of future pandemics or geopolitical unrest may contribute to cautious investor sentiment.
• This could represent a moment of opportunity for those willing to embrace potential risks.

Future Predictions for IAG Shares

Analyst forecasts for IAG appear optimistic, with expectations of rising revenue and earnings over the coming years. The consensus indicates that dividends will remain stable, albeit at a lower yield of 2.32% compared to other FTSE 100 stocks. Of the 17 analysts monitoring IAG, a significant majority recommend buying or outperforming the stock, with only one analyst suggesting a sell.

Furthermore, the analysts project a potential price target increase of 17.8% over the next 12 months, with one particularly bullish analyst anticipating a 65% share price rise. While the extraordinary growth of the past two years may not be sustainable, IAG still holds considerable value for investors who understand the associated risks.