It’s a pretty extraordinary return from a business that most investors had written off as broken after the pandemic. Yet despite that enormous run, the shares still trade on a price-to-earnings (P/E) ratio of just 7.9. That’s the kind of valuation usually reserved for companies in serious trouble, not ones posting record profits.

So why’s IAG still so cheap? And is now the time to do some shopping?

The business is delivering in a big way

Looking at the group’s latest (first quarter) results, revenue grew 1.9% to €7.2bn, comfortably ahead of analyst expectations, while operating profit surged 77.3% to €351m on the back of broadly flat costs.

Digging deeper, the premium cabin demand is the standout story.

Business travel continues to recover strongly, and the transatlantic routes that British Airways (BA) dominates are proving especially lucrative. BA now accounts for roughly half of group operating profits and holds an enviable portfolio of Heathrow slots that are near-impossible to replicate.

The Loyalty division is also quietly outperforming, with revenue up 10% paired with a 32.6% boost to profits at a 20.1% margin. And with all that in mind, it isn’t so surprising that the average consensus from institutional analysts suggests that the IAG share price will continue to rise from here, reaching 523p by this time next year.

But if the business is beating profit expectations and the experts are calling for the stock to go higher, why have IAG shares struggled to climb in 2026?

What’s keeping the valuation so depressed?

The answer isn’t anything nuanced. It’s fuel costs. The Middle East conflict’s sent IAG’s full-year fuel bill to an estimated €9bn, roughly €2bn above what was planned at the start of the year. And while management expected to pass on around 60% of this to customers through higher ticket prices, the remaining 40% will nonetheless apply notable pressure to margins and cash flow.

In fact, free cash flow guidance for 2026 has already been pulled back. And if tensions in the Middle East continue to escalate, another outlook downgrade could be on the horizon.

It’s a sharp reminder that airlines are cyclical, capital-intensive, and highly sensitive to things entirely outside their control. And the stock market has unsurprisingly baked this uncertainty into the share price. That’s why IAG shares are trading at a seemingly cheap P/E ratio today.

The question now is, should investors take advantage?

A stock worth considering?

On the surface, the low P/E ratio makes IAG shares appear cheaper than they actually are. The fuel cost uncertainty might be a short-term problem, but if the wrong conditions materialise, it can rapidly evolve into a substantial one.

In other words, there’s a lot of risk surrounding this enterprise right now even with a financially disciplined management team at the helm. For investors willing to take on the geopolitical risk, IAG could emerge as a top performer if the war in the Middle East cools.

But personally, I think there are better opportunities to explore elsewhere. Such as…

What income stock do we like better than International Consolidated Airlines Group right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post Up 165% but still with a P/E of 7.9. Is the IAG share price a generational bargain? appeared first on The Twelfth Magpie.

Let’s take a closer look.

Who?

In 2025, International Consolidated Airlines Group (LSE:IAG), reported earnings per share (EPS) of 69.5 euro cents (59.2p at current (13 July) exchange rates), a 25% improvement on the previous year.

Yet the shares of the owner of Aer Lingus (Ireland), British Airways (UK), Iberia, LEVEL, and Vueling (all Spain) change hands for less than eight times historic earnings. By comparison, the FTSE 100 has a price-to-earnings ratio of around 18.

But not all industries are the same. Each has different risk profiles, capital expenditure requirements, and debt burdens. Indeed, International Consolidated Airlines faces all sorts of operational challenges – everything from rising fuel costs and geopolitical conflicts, to industrial action and regulatory changes — that could make investors wary.

That’s why, generally speaking, airlines attract a lower earnings multiple than other sectors.

A real example

However, I think the best way to value a company is to consider mergers and acquisitions in the same industry. After all, these are actual deals.

Here, we are fortunate because easyJet recently announced that it’s agreed in principle to be bought by Apollo Global Management. The transaction, which is subject to approval by Europe’s competition authorities, values the budget airline at 10.8 times its EPS for the year ended 30 September 2025.

If International Consolidated Airlines was valued on the same basis, its share price would be 35% higher. On this basis, the stock’s in bargain territory.

Indeed, analysts appear to agree that the airline’s stock is undervalued. They have a consensus 12-month share price target that’s around 15% higher. The most optimistic appears to value the group in line with the easyJet deal.

And despite the challenges that the Iran war caused – a spike in the price of jet fuel and the cancellation of thousands of flights – analysts are expecting an operating profit (before exceptional items) of £5.2bn in 2026.In 2025, it was £5bn.

Like most of us, shareholders will be hoping that the recent resumption of bombing is a temporary blip and that the ceasefire will resume again soon.

My view

International Consolidated Airlines has some strong brands in its stable. And it has a good mix of long-haul and short-haul flights. It also covers all price points in a competitive market. In addition, the business has proven to be remarkably resilient in recent years, which is a sign of a strong management team.

But although the group has much going for it — and I believe its shares are attractively priced — I think there are some better opportunities to consider elsewhere. More specifically, I reckon there are other industries likely to grow faster. Also, its stock’s twice as volatile as the market as a whole.

In short, I don’t have anything against International Consolidated Airlines – its low valuation multiple definitely makes it an attractive prospect — it’s just that I think more money could be made in other sectors where there are likely to be fewer potential challenges to contend with.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

James Beard does not hold any positions in the companies mentioned.

The post The FTSE 100’s stuffed full of bargains including this stock with a P/E ratio of just 7.9! appeared first on The Twelfth Magpie.

Can they continue to soar? Let’s take a look at the set-up.

The backdrop has improved

Two months ago, there was quite a bit of uncertainty here. At the time, the US and Iran were locked in open conflict and oil prices – a major cost for airlines – were sky-high.

Fast forward to today and the backdrop for IAG is far more stable. There’s still some uncertainty over the geopolitical landscape, of course. But oil prices have come down significantly, which is great news for the airlines.

Oil price risks

Now, we can’t rule out another spike in oil prices. If recent shipping attacks in the Strait of Hormuz escalate, oil could easily shoot up again.

The good news is that IAG is about 70% hedged in terms of fuel prices for the rest of the year and also has levers to pull to offset higher costs. So, while a spike could hit its profits, it’s unlikely to be a total disaster.

Demand is robust

Turning to demand, the backdrop appears to be favourable. In its Q1 results, the company said: “Demand for travel continues to be robust in our main markets and we have seen resilient booked revenue for the second quarter at 80%, which is in line with historical levels.”

One thing the company has going for it here is that its flagship British Airways brand serves a more affluent customer base. These customers are less likely to cut spending on travel amid the cost-of-living crisis.

Another positive for IAG is that there are a lot of cashed-up Americans who are keen to travel to Europe. And the US/UK route is where IAG makes a lot of its money.

It’s worth noting that passenger revenue in the first quarter of 2026 was up 4% year on year. That was despite all the chaos in the Middle East.

How’s the valuation?

In terms of the valuation, it’s relatively low at present – the forward-looking price-to-earnings (P/E) ratio is only 8.5. By contrast, US airline powerhouse Delta Airlines is trading at 15.7 times this year’s earnings forecast.

However, it should be noted that the P/E ratio for IAG has historically been quite low. One reason for this is that this airline operator is highly cyclical meaning that strong earnings are typically unsustainable over a long period.

Analysts are bullish

City analysts do see potential for share price gains from here though. At present, the average price target is just over £5.

Some firms have significantly higher price targets. For example, Barclays just put a 575p target on the stock.

A favourable set-up

Putting this all together, the set-up here looks quite favourable, to my mind. I wouldn’t be surprised to see the shares go higher.

That said, airlines are higher-risk, cyclical investments. So, while the shares could be worth a look, there could potentially be better stocks to consider buying for the long term.

What income stock do we like better than International Consolidated Airlines Group right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Edward Sheldon does not hold any positions in the companies mentioned

The post £5,000 invested in IAG shares 2 months ago is now worth… appeared first on The Twelfth Magpie.

IAG, as it’s called, has got a lift from reports of a US peace deal with Iran. The Middle East conflict hit the airline conglomerate, which owns British Airways, Iberia, Vueling and Aer Lingus, on two fronts. First, by threatening to drive up the cost of jet fuel, and second, by shutting regional flight hubs such as Dubai. Unsurprisingly, it’s also a key beneficiary as hopes grow that hostilities will cease.

Why is this FTSE 100 stock leading the pack?

We’ve seen this pattern before. As Covid lockdowns grounded fleets, IAG was hit harder than any other FTSE 100 stock (aside from Rolls-Royce, which makes airline engines). The Ukraine war didn’t help, driving up oil prices. In both cases, the shares plunged on the initial panic, then recovered as the situation improves.

Anybody buying IAG today must accept it’s likely to be on the front line of the next bout of volatility too, wherever that comes from. It could be war, recession, a natural disaster, climate change, whatever. The board can’t just cut back on costs to weather the storm as these tend to be fixed, and high. It just has to sit things out, until events swing back in its favour.

The shares are certainly swinging today. They’re actually up 143% over the last five years. But here’s the most surprising thing: despite that market-beating growth, they remain cheap, with a price-to-earning ratio of just 7.35.

Normally, when a stock has a strong run like that, I’d expect to see a high P/E, but that’s less than half the FTSE 100 average. Why’s it still so cheap?

My theory is that given the risks I’ve listed above, investors want a bit of a valuation cushion, in case of further turbulence. So does that mean the P/E may always look low? Perhaps, so we shouldn’t put too much faith in it.

Will it continue to grow at this speed?

Can IAG investors expect another bumper year? Some 23 analysts offer one-year share price forecasts, and they’re predicting the stock will hit 491p in 12 months. Disappointingly, that’s an increase of just 5.8% from today’s 464p. If they’re correct, it looks like the pace of growth is going to slow. Investors will get income on top, but the forward yield of 1.98% is still relatively low.

I think the shares are still worth considering today. IAG can’t afford to rest on its laurels, it must always be bracing itself for the next challenge. That injects discipline. And despite my reservations about that P/E, it still looks good value.

But it will remain vulnerable to Middle East and oil price uncertainty, and future growth may not be quite as spectacular. This is a stock to buy on the dips rather than the spikes.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Harvey Jones owns shares in International Consolidated Airlines Group and Rolls-Royce Holdings.

The post Up 47% in a year! Now see what the booming IAG share price could be worth in 12 months appeared first on The Twelfth Magpie.

A new rates regime

First up is NatWest Group (LSE:NWG). With a P/E ratio of 9.02, it certainly gets a tick in that box. This comes even with the stock up 19% over the past year.

I think part of the valuation gap relative to the rest of the index still comes from lingering concerns about the low-interest-rate environment we had at the start of the pandemic. With such low rates (almost at zero), it was hard for the bank to make net interest income. However, that has now changed, and interest rates could even get hiked further this summer!

It’s true that an ongoing risk is that the market applies a permanent discount to traditional banks because of regulatory pressures and political uncertainty.

Yet after years of restructuring and cost-cutting, NatWest has become a much simpler business, with a strong position in UK retail and commercial banking. One reason why I think the shares may appear attractive is the bank’s ability to generate consistent profits from its large customer base. In the Q1 results, it had an “attributable profit of £1.4 billion and earnings per share of 17.9 pence, up 15.5% compared with Q1 2025.” More than that, it said that across the customer base it was seeing “healthy customer activity”. This bodes well going forward.

If interest rates remain higher than the ultra-low levels seen for much of the previous decade, NatWest should continue to benefit.

Flying higher

Another idea is the International Consolidated Airlines Group (LSE:IAG). It has a P/E ratio of just 7.28, with the stock up 43% in the last year.

I believe it’s an interesting example of a company where investor pessimism may have created an opportunity. The owner of airlines including British Airways and Iberia has historically traded at a discount because airlines are viewed as cyclical, capital-intensive businesses with unpredictable profits. However, that negative perception may overlook how much IAG has improved its financial position and how powerful the recovery in travel demand has been.

For example, recent Q1 results showed a strong start to the year, with operating profits jumping 77.3% to £302m (ahead of expectations) on a 1.9% rise in revenue to £6.05bn. Aside from just having fuller planes, it was also driven by higher ticket prices. Impressively, net debt was reduced significantly by £1.55bn, down to £3.62bn.

The longer we see the company impress on earnings calls, the less likely the stock is to remain cheap for much longer. That change in sentiment could push the share price higher.

However, investors should not ignore the risks. Airlines remain vulnerable to fuel price increases, especially as we’re seeing at the moment with the spike in oil prices. Competition from low-cost carriers continues to pressure pricing. But overall, I think IAG, along with NatWest, are both cheap FTSE 100 options for investors to consider.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Jon Smith has no positions in the shares mentioned.

The post 2 cheap FTSE 100 stocks that have P/E ratios below 10 appeared first on The Twelfth Magpie.

For now, there is no settled peace in the region. But if that comes, what might it mean for the IAG share price?

The market’s already been pricing in recovery

Perhaps surprisingly, I reckon the answer might be ‘not that much’.

I expect that any formal viable peace deal in the region could provide a short-term lift to airline shares, including IAG.

But there is an interesting anomaly here. The IAG share price is already within 2% of its late-February high.

Wizz Air remains 15% below its late-February high. easyJet is actually 6% higher than it was back then, although that boost partly reflects potential takeover interest.

In other words, the market seems already to have discounted the possible impact of ongoing fallout from the conflict on IAG’s business, at least judging by its share price.

Are things back on track?

That seems premature to me.

Volatile jet fuel prices do not look set to go away any time soon despite recent falls. IAG already conceded last month that, “the impact of the higher fuel price will inevitably lead to lower profit this year than we originally anticipated”.

Even if the Middle Eastern conflict winds down fully soon – which is by no means certain – ongoing supply damage and supply chain dislocation could mean that jet fuel prices remain volatile for months to come.

As for passenger confidence recovery, I think that could take years.

IAG has been shifting planes away from Middle Eastern routes onto ones elsewhere where it foresees strong demand.

That could mitigate the impact on passenger numbers of the Middle Eastern conflict. Time will tell how successful the strategy is.

I’m not tempted at this price

Looking at the IAG share price – up 37% in a year – there seems to be little obvious evidence of some of the challenges the aviation industry has lately been facing. After all, that is slightly better than double the 18% gain seen in the wider FTSE 100 index during that period.

As I think expected recovery is more or less priced in already, I do not expect that any solid Middle Eastern peace deal would necessarily boost the share price much.

Should I buy anyway?

At eight times earnings, the price may not look expensive.

Investors who have taken advantage of past industry volatility have been handsomely rewarded: the price has more than doubled over the past five years.

But, despite the implied maket nonchalance reflected in the share price, I continue to dislike the risk profile for IAG. Fuel prices remain highly volatile. Economic confidence has been damaged, certainly in the Middle East but also in key IAG markets including Europe and North America.

That is a heady mixture. I am not convinced it is properly factored into the current share price. I will not be buying any IAG shares any time soon.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Christopher Ruane does not hold positions in any of the shares mentioned.

The post What might Middle Eastern peace mean for the IAG share price? appeared first on The Twelfth Magpie.

Friday (12 June) was one of the fun days, with IAG shares climbing 7.07% to lead the FTSE 100 leaderboard. It may seem like an odd winner, given how the SpaceX IPO dominated the headlines. But Elon Musk had nothing to do with the jump. It was down to reports that the US and Iran are close to striking a peace deal that might actually hold for more than 10 minutes.

That gave IAG a lift for two reasons. First, the oil price plunged, to $81 a barrel. That’s well below its peak of $118, which it hit on 29 April. This should cut the price of jet fuel, a major cost for any airline. Second, the war has massively disrupted travel to the Middle East, including key hub Dubai, hitting revenues. IAG will clearly benefit if hostilities cease.

Can it sustain the recovery?

Volatility now comes as standard with this stock, and has done since the pandemic, when IAG was pummelled. Airlines are exposed to every major international stock, whether war, oil spikes, recessions, tariffs, climate change, bad weather, natural disasters, whatever. They have huge fixed costs, but revenues can be highly variable.

Despite that, the overall pattern has been positive. IAG shares are up 119% over five years, and 33% over the last 12 months. Friday obviously helped in that. But here’s the odd thing. The shares still look dirt cheap, with a price-to-earnings ratio of just 6.6. That’s well below the FTSE 100 average of around 16.

That tempts me but I’m also cautious, because I suspect its P/E may always be a little underpowered. I think investors want a valuation cushion, given all the risks I’ve just listed.

IAG operates in a cyclical sector, and in the past I’ve argued for buying its shares when they’re down rather than up. If the Iran deal falls apart next week, as it easily could, then I know which stock is likely to be one of the day’s biggest fallers. So how do investors cope with that?

Is this FTSE 100 stock good value?

First, they should decide whether they want to be exposed to that kind of volatility at all. And second, by taking the long-term view. Management has done a good repair job since the pandemic. It’s halved net debt to €4.2bn and has just launched a second €500m buyback scheme to further reduce its share capital. Full-year profits have been rebuilt.

• 2025 – €5.02bn
• 2024 – €4.44bn
• 2023 – €3.51bn
• 2022 – €1.26bn
• 2021 – (€2.77bn loss)

The board has also been restoring dividends. The yield is forecast to be 2.1% this year, and 2.9% in 2027.

In my view, IAG is one of the more exciting stocks on the FTSE 100, and worth considering with a long-term view. Just don’t get too excited by sudden spikes like Friday’s. If tempted, maybe wait for the next dip. It probably won’t be far away.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Harvey Jones owns shares in IAG.

The post Up 119% but with a P/E of just 6.6% – what’s going on with the IAG share price? appeared first on The Twelfth Magpie.

On any given day, I could produce three reasons why stock markets will crash and three reasons why they could hit fresh highs. Investors have to tune out the short-term noise because the long term matters far more.

Some like to buy defensive stocks when markets are volatile. I think it’s also a good opportunity to buy stocks at the higher end of the risk scale, as they could suddenly be trading at bargain basement prices. These three are worth a look, I feel.

Could IAG fly higher after another sell-off?

British Airways-owner International Consolidated Airlines Group (LSE: IAG) is among the bigger FTSE 100 fallers today, which doesn’t surprise me at all. IAG is a cyclical stock. In difficult periods, its shares struggle. The pandemic nearly grounded the business for good. But in the good times, it tends to fly.

I saw the same pattern after Donald Trump unleashed his tariffs last year. I bought the shares when they were down, and they’ve rallied strongly since.

Today, the valuation still looks attractive with a price-to-earnings ratio of 6.8. That gives investors a much-needed valuation cushion. A wider market sell-off could make it even cheaper. I’d only consider buying with a genuine long-term horizon though, giving it time to fly through temporary storms.

Have you overlooked Lion Finance?

Shares in Lion Finance Group (LSE: BGEO) have soared a stunning 727% over five years. Only Rolls-Royce has done better in the FTSE 100. Yet plenty of UK investors still barely know it exists.

Formerly Bank of Georgia, the business offers exposure to faster-growing Eastern European economies. That creates opportunity, but also serious risk. Georgia remains politically volatile and expansion into Armenia increases that exposure.

On 7 May, the group posted a healthy 14% rise in profits, upped the dividend and extended its share buyback programme.

Even after the huge rally, the stock still trades on a modest P/E ratio of 7.6. Rising energy prices and Iran-driven inflation could hit performance, while those looking at it today may have to accept they’ve missed the explosive early growth phase. Even so, I still think adventurous investors might want to consider it.

Could IG Group thrive on volatility?

I was sorely tempted by IG Group Holdings (LSE: IGG) a couple of years ago, but decided I had enough exposure to the financials sector. Shame though. Its shares have surged 70% in a year.

The trading platform benefits when markets are volatile, as this tempts investors to trade more heavily in shares, currencies and commodities.

Despite the strong run, the valuation still looks reasonable with a P/E ratio of 9.4. IG also generates solid cash flow, holds strong capital reserves and has a trailing dividend yield of 2.6%. It’s also been running buybacks. The group must keep attracting new customers because leveraged trading won’t suit everybody forever. I still think the stock looks worth considering for long-term growth and income. Especially if markets remain volatile.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Harvey Jones owns shares in International Consolidated Airlines Group.

The post 3 UK stocks to consider snapping up if the stock market crashes this month appeared first on The Twelfth Magpie.

IAG, as it’s also known, should be suffering a severe bout of turbulence as the Iran conflict drives up the price of jet fuel, threatening shortages and flight cancellations.

How much will Iran cost this stock?

The board has warned of the danger. Even though 70% of its 2026 fuel needs are hedged, costs are still expected to land €1.6bn higher than originally expected, hitting a hefty €9bn. Given that IAG only made a pre-tax operating profit of $5bn last year, that’s quite a hit to absorb. It’s a shame, because full-year profits have been climbing nicely.

• 2025 – €5.024bn
• 2024 – €4.443bn
• 2023 – €3.507bn
• 2022 – €1.256bn
• 2021 – (€2.765bn)

That 2021 figure, which showed a €2.765bn loss, reflect the ravages of the pandemic, when its fleets were grounded and debt swelled. As profits have recovered, so has the IAG share price. It’s up 120% over five years, and almost 30% over 12 months. Obviously, last month helped. But how come it did so well?

IAG posted a decent set of Q1 profits on 8 May, with revenues up 19% to €7.2bn, slightly better than expected. The board also paid off another €1.8bn of net debt, reducing the total to €4.2bn. In 2022, debt peaked at €10.4bn. So that’s good going.

Q1 ran to 31 March, so only the final month reflected events in Iran. Yet the shares still picked up momentum in the weeks that followed, which I put down to growing hopes of a deal in the Middle East.

Is this still a bargain buy today?

So far, investors have been willing to accept Donald Trump’s assurances that a solution is close. They’re calculating he doesn’t want to go into November’s mid-term elections with missiles and oil prices flying. You can take your own view on whether he’ll manage it.

Investors considering IAG today will be impressed by its low price-to-earnings ratio of 6.8. We shouldn’t assume it will climb towards the FTSE 100 average of 16.2 though. Airlines have high fixed costs and are vulnerable to a host of shocks, including geopolitics, climate change, oil prices, natural disasters and the business cycle. Investors may be reluctant to bid the price too high.

Yet there are other attractions. IAG still has to complete the remaining €1bn of its ongoing €1.5bn share buyback programme. And the dividend is slowly recovering from its post-Covid cancellation. The forward yield is now 2.5%.

But for me, this is mostly about the growth, and I’ve had plenty of that. I think IAG shares are worth considering, but they remain at the mercy of events in Iran. Perhaps it’s one to consider buying on a dip, rather than a spike. We might get one in June and I’ll be watching out for it. Maybe you should too.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Harvey Jones owns shares in International Consolidated Airlines Group 

The post Up 18% in a month! What’s fuelling the red-hot IAG share price? appeared first on The Twelfth Magpie.

There’d be a little bit in dividend cash to add to that. But with a yield of only 2.1% forecast for the current year, it really has been about share price growth.

A rise like this might seem surprising when we look at other UK-listed airlines. Shares in easyJet have slumped 60% in the same five years. Wizz Air Holdings has done worse, with a painful 78% loss. In tough times for a sector, maybe bigger really is best.

Pausing for breath?

The IAG share price has gone off the boil in 2026, up just 3% year to date. That’s mainly due to an Iran-related dip though. But even with the price of jet fuel through the roof, can IAG get back to its impressive growth path? There are signs it might do exactly that.

We are pleased to report a strong first quarter, in which revenue grew by 1.9% and profit grew by 77.3% to €351 million … IAG is uniquely positioned to navigate the current headwinds created by the Middle East conflict thanks to our leading positions across diverse markets, strong brands, structurally high margins and strong balance sheet.

CEO Luis Gallego during May’s Q1 results

That balance sheet could be key. The airline does carry net debt. But at €5,948m at the end of 2025, it had fallen 43% from €10,385m in 2022. And forecasts show it dropping to just €3,615m by 2028.

Oil shock

We really can’t just overlook the shock of oil prices from the Iran conflict. The company expects its fuel bill for the full year to be about €2bn more than it was in 2025, at around €9bn. But while an extra €2bn cost is nothing to sniff at, this is a company with over €33bn revenue in 2025 — and €5bn operating profit.

And the hit is a lot less than it could have been, as the company has been managing its fuel hedging impressively well.

Yes, it means some pain in 2026. But I wouldn’t let that put me off the long-term potential for a stock like this. And the key thing for me is that, even at this very tough time, IAG’s way more than enough liquidity to get through the short-term crisis.

Headwinds

International Consolidated might have about 70% of its 2026 fuel needs hedged. But all those potential flyers out there can’t say the same for their household energy bills. And how aviation demand plays out in the coming months is a big unknown. It really might take some time to get back on track

I could see IAG shares continuing their current weakness for the rest of the year. But for long-term investors looking beyond the current turmoil, this could be one to consider putting a bit of money on now.

Should you invest £5,000 in International Consolidated Airlines Group right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if International Consolidated Airlines Group made the list?

Alan Oscroft does not hold any positions in the companies mentioned.

The post £10,000 invested in IAG shares 5 years ago has now climbed this high… appeared first on The Twelfth Magpie.