LSE:IAG

Stock Analysis Report

International Consolidated Airlines Group

Executive Summary

International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world.


Snowflake Analysis

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has International Consolidated Airlines Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IAG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

IAG

-1.4%

GB Airlines

0.2%

GB Market


1 Year Return

-3.4%

IAG

11.6%

GB Airlines

6.4%

GB Market

Return vs Industry: IAG underperformed the UK Airlines industry which returned 11.6% over the past year.

Return vs Market: IAG underperformed the UK Market which returned 6.4% over the past year.


Shareholder returns

IAGIndustryMarket
7 Day-2.6%-1.4%0.2%
30 Day2.3%-0.4%-1.4%
90 Day12.2%13.6%3.8%
1 Year7.9%-3.4%20.3%11.6%11.9%6.4%
3 Year40.4%18.2%65.0%45.1%18.6%3.8%
5 Year34.0%7.4%46.3%21.4%34.8%4.0%

Price Volatility Vs. Market

How volatile is International Consolidated Airlines Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is International Consolidated Airlines Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IAG (£6.23) is trading below our estimate of fair value (£15.73)

Significantly Below Fair Value: IAG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: IAG is good value based on its PE Ratio (6.6x) compared to the Airlines industry average (10x).

PE vs Market: IAG is good value based on its PE Ratio (6.6x) compared to the UK market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: IAG is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: IAG is overvalued based on its PB Ratio (2.3x) compared to the GB Airlines industry average (2.2x).


Next Steps

Future Growth

How is International Consolidated Airlines Group forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

7.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IAG's forecast earnings growth (7.1% per year) is above the savings rate (0.5%).

Earnings vs Market: IAG's earnings (7.1% per year) are forecast to grow slower than the UK market (12.9% per year).

High Growth Earnings: IAG's earnings are forecast to grow, but not significantly.

Revenue vs Market: IAG's revenue (3.3% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: IAG's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IAG's Return on Equity is forecast to be high in 3 years time (22.6%)


Next Steps

Past Performance

How has International Consolidated Airlines Group performed over the past 5 years?

18.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IAG has a high level of non-cash earnings.

Growing Profit Margin: IAG's current net profit margins (8.7%) are lower than last year (12.1%).


Past Earnings Growth Analysis

Earnings Trend: IAG's earnings have grown by 18.3% per year over the past 5 years.

Accelerating Growth: IAG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: IAG had negative earnings growth (-22.4%) over the past year, making it difficult to compare to the Airlines industry average (-9.8%).


Return on Equity

High ROE: IAG's Return on Equity (34%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is International Consolidated Airlines Group's financial position?


Financial Position Analysis

Short Term Liabilities: IAG's short term assets (€12.5B) do not cover its short term liabilities (€14.8B).

Long Term Liabilities: IAG's short term assets (€12.5B) do not cover its long term liabilities (€14.7B).


Debt to Equity History and Analysis

Debt Level: IAG's debt to equity ratio (23.8%) is considered satisfactory.

Reducing Debt: IAG's debt to equity ratio has reduced from 40.7% to 23.8% over the past 5 years.

Debt Coverage: IAG's debt is well covered by operating cash flow (243.1%).

Interest Coverage: IAG's interest payments on its debt are well covered by EBIT (13.4x coverage).


Balance Sheet

Inventory Level: IAG has a high level of physical assets or inventory.

Debt Coverage by Assets: IAG's debt is covered by short term assets (assets are 8x debt).


Next Steps

Dividend

What is International Consolidated Airlines Group's current dividend yield, its reliability and sustainability?

4.17%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%1.8%markettop25%5.1%industryaverage3.3%forecastin3Years4.6%

Current dividend yield vs market & industry

Notable Dividend: IAG's dividend (4.17%) is higher than the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: IAG's dividend (4.17%) is low compared to the top 25% of dividend payers in the UK market (5.1%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, IAG has been paying a dividend for less than 10 years.

Growing Dividend: IAG's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (27.7%), IAG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IAG's dividends in 3 years are forecast to be well covered by earnings (23.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.5yrs

Average management tenure


CEO

Willie Walsh (57yo)

9.1yrs

Tenure

€3,429,000

Compensation

Mr. William Matthew Walsh, also known as Willie, M.Sc. serves as the Chief Executive Officer of International Consolidated Airlines Group, S.A. since January 2011. Mr. Walsh served as Chief Executive Offic ...


CEO Compensation Analysis

Compensation vs Market: Willie's total compensation ($USD3.72M) is about average for companies of similar size in the UK market ($USD4.68M).

Compensation vs Earnings: Willie's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William Walsh
CEO & Executive Director9.1yrs€3.43m0.066% 8.1m
Stephen William Gunning
CFO & Executive Director0.7yrsno data0.0088% 1.1m
John Gibbs
Chief Information Officer0.4yrsno datano data
Andrew Light
Head of Investor Relations0yrsno datano data
Chris Haynes
General Counsel9.1yrsno data0.0072% 894.2k
Julia Simpson
Chief of Staff9.1yrsno datano data
Glenn Morgan
Head of Digital Business Transformation0yrsno datano data
Álvaro López-Jorrín Hernández
Secretary of the Board of Directors6.1yrsno datano data
Luis Gallego Martín
Chairman & CEO of Iberia6.1yrs€541.00k0.017% 2.1m
Alejandro Cruz de Llano
Chairman & CEO of British Airways3.8yrsno datano data

6.5yrs

Average Tenure

Experienced Management: IAG's management team is seasoned and experienced (6.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Walsh
CEO & Executive Director9.1yrs€3.43m0.066% 8.1m
Stephen William Gunning
CFO & Executive Director0.7yrsno data0.0088% 1.1m
Luis Gallego Martín
Chairman & CEO of Iberia6.1yrs€541.00k0.017% 2.1m
Alejandro Cruz de Llano
Chairman & CEO of British Airways3.8yrsno datano data
Javier Sanchez-Prieto
Vueling Chairman & CEO3.8yrsno datano data
Sean Doyle
CEO & Executive Director of Aer Lingus1.1yrsno datano data
Marc Bolland
Non Executive Director3.7yrs€126.00kno data
Kieran Poynter
Non-Executive Director9.1yrs€167.00k0.00076% 94.0k
Antonio Vázquez Romero
Independent Chairman0yrs€649.00k0.026% 3.2m
Alberto Terol Esteban
Senior Independent Director0yrs€142.00k0.0013% 165.7k

3.8yrs

Average Tenure

60yo

Average Age

Experienced Board: IAG's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

International Consolidated Airlines Group, S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: International Consolidated Airlines Group, S.A.
  • Ticker: IAG
  • Exchange: LSE
  • Founded: 2010
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: UK£12.368b
  • Shares outstanding: 1.99b
  • Website: https://www.iairgroup.com

Number of Employees


Location

  • International Consolidated Airlines Group, S.A.
  • El Caserío
  • Iberia Zona Industrial nº 2(La Muñoza)
  • Madrid
  • Madrid
  • 28042
  • Spain

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IAGBME (Bolsas y Mercados Espanoles)YesOrdinary SharesESEURJan 2011
IAGLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 2011
ICAG.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJan 2011
BABW.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 2011
INRDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 2011
IAGEBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBEURJan 2011
IAGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 2011
IAGWBAG (Wiener Boerse AG)YesOrdinary SharesATEURJan 2011
INRETLX (Eurotlx)YesOrdinary SharesITEURJan 2011

Biography

International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. The company operates under the British Airways, Iberia, Vueling, LEVEL, and Aer Lingus brands. It operates a fleet of 573 aircraft flying to 268 destinations. The company was incorporated in 2010 and is based in Madrid, Spain. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 22:00
End of Day Share Price2020/02/21 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.