British Airways owner International Consolidated Airlines Group, S.A. (GB:IAG) has topped the FTSE 100 index with a stellar 94% growth in 2024. The shares also outperformed investors’ favorite Rolls-Royce Holdings (GB:RR), which recorded a 90.7% return in 2024. Looking ahead, analysts remain optimistic with a Strong Buy rating but expect modest growth for IAG shares. Nevertheless, some analysts are forecasting a higher increase in the share price in 2025.
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IAG is a conglomerate managing major airlines in Ireland, Spain, and the UK. The majority of the company’s revenue comes from British Airways.
IAG Sees Robust Travel Demand
IAG has reported strong financial performance in FY24, driven by robust travel demand. In its most recent third-quarter results, the airline posted a 15.4% year-over-year increase in operating profit. Meanwhile, Q3 revenues grew 8% to €9.3 billion, surpassing the €9.1 billion estimate. Additionally, IAG revealed a €350 million share buyback program along with its Q3 results.
IAG expects another solid performance in the fourth quarter and sees sustainable travel demand in the long term.
Analysts Remain Bullish on IAG Shares
In December, analysts from Jefferies and RBC Capital maintained their Buy ratings on IAG stock, forecasting a 16% growth. Before that, Deutsche Bank upgraded its rating to Buy, predicting a 32.5% growth.
Analyst Jaina Mistry of Jefferies believes that there is optimism for medium-term growth due to British Airways’ recovery and a new fleet, which could improve returns and cash flow. She also stated that the company’s stock is undervalued, with earnings per share (EPS) expected to grow by 14% annually from 2024 to 2026.
Similarly, Deutsche Bank analyst Jaime Rowbotham is bullish on the airline’s limited capacity on transatlantic routes, especially between the UK and other destinations. This is likely to drive IAG’s ability to implement higher pricing strategies. Furthermore, falling fuel costs are expected to boost the company’s earnings per share momentum.
Insights from TipRanks’ Bulls Say, Bears Say
TipRanks’ Bulls Say, Bears Say tool shows that bulls are confident in IAG’s strong operational performance and share buyback program.
On the other hand, bears are concerned about ongoing geopolitical tensions and macroeconomic challenges.
What Is the Price Target for IAG in 2025?
IAG stock has a Strong Buy rating on TipRanks, backed by nine Buy, and two Hold recommendations. The IAG share price forecast is 310.73p, which is 3% higher than the current trading level.
