Earnings Update: Here's Why Analysts Just Lifted Their International Consolidated Airlines Group S.A. (LON:IAG) Price Target To UK£3.87

Shareholders might have noticed that International Consolidated Airlines Group S.A. (LON:IAG) filed its full-year result this time last week. The early response was not positive, with shares down 4.3% to UK£3.24 in the past week. International Consolidated Airlines Group reported €32b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.56 beat expectations, being 4.5% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on International Consolidated Airlines Group after the latest results.

Check out our latest analysis for International Consolidated Airlines Group

Taking into account the latest results, the most recent consensus for International Consolidated Airlines Group from 26 analysts is for revenues of €33.3b in 2025. If met, it would imply a modest 3.7% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 10% to €0.63. Before this earnings report, the analysts had been forecasting revenues of €33.0b and earnings per share (EPS) of €0.59 in 2025. So the consensus seems to have become somewhat more optimistic on International Consolidated Airlines Group's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.2% to UK£3.87. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values International Consolidated Airlines Group at UK£5.07 per share, while the most bearish prices it at UK£1.72. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that International Consolidated Airlines Group's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that International Consolidated Airlines Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards International Consolidated Airlines Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that International Consolidated Airlines Group's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for International Consolidated Airlines Group going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for International Consolidated Airlines Group that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.