International Consolidated Airlines Group, S.A. (LON:IAG): Will The Growth Last?

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Since International Consolidated Airlines Group, S.A. (LON:IAG) released its earnings in March 2019, analyst consensus outlook appear cautiously subdued, as a 6.4% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 25%. Currently with trailing-twelve-month earnings of €2.9b, we can expect this to reach €3.1b by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for International Consolidated Airlines Group in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for International Consolidated Airlines Group

What can we expect from International Consolidated Airlines Group in the longer term?

The view from 22 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

LSE:IAG Past and Future Earnings, June 26th 2019
LSE:IAG Past and Future Earnings, June 26th 2019

This results in an annual growth rate of 9.7% based on the most recent earnings level of €2.9b to the final forecast of €3.7b by 2022. This leads to an EPS of €1.45 in the final year of projections relative to the current EPS of €1.43. In 2022, IAG’s profit margin will have expanded from 12% to 13%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For International Consolidated Airlines Group, I’ve compiled three relevant aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is International Consolidated Airlines Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether International Consolidated Airlines Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of International Consolidated Airlines Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.