IAG Share Price Struggle in the Markets Explaned

Summary:

IAG share price resumed its bearish trend in today's trading session after the current 2 percent drop in the markets.

In today’s trading session, the IAG share price resumed its long-term bearish trend, falling by a percentage point. The strong bearish trend has persisted throughout the year, losing 25 per cent of its value year-to-date.

For the past year, the International Consolidated Airlines Group SA (IAG) share price has fallen by 40 per cent. However, in the same period, the FTSE 100 index has remained relatively stable, losing only $0.58 of its value. The index, a composite of the top 100 shares listed on the London Stock Exchange, also lists IAG as one of its members.

The comparison gives us an idea of how IAG has performed in the markets in comparison to other companies of its size. Although the data shows a huge underperformance of the company, there are many reasons why the IAG share price has not had a great year compared to other companies.

One of these reasons is due to the recent COVID restrictions that affected the company’s revenue due to government policies. However, even with the lifting of these restrictions a few months ago, the share prices have continued to underperform. One of the key reasons for the underperformance in the past few weeks has been due to poor market sentiments. Fear of a recession in the UK has gripped the whole nation, as citizens continue to struggle with the rising cost of living caused by high inflation. These concerns have played a significant role over the past few weeks across the financial markets in the UK.

FTSE 100 index, for instance, has lost 6 per cent of its value in the past one month. The drop is considerably similar to what happened with the IAG shares, indicating factors far beyond IAG’s control affect its share prices.

Another factor affecting the share price is rising fuel costs. There is a high expectation that the prices have not reached their price highs, and the costs may continue going up. In addition, an increase in jet fuel will also affect the company’s revenue due to rising operating costs. This has kept many investors at bay, resulting in the share prices’ continued fall.

Therefore, my IAG share price analysis expects the prices to continue dropping as long as the poor market sentiments remain. As a result, there is a high likelihood that we will see prices trading below 100p in the next few trading sessions.