IAG Share Price (LON: IAG) Looks Set To Retest Resistance as Price Target Raised

IAG shares (LON:IAG) have been given a further vote of confidence, as Deutsche Bank significantly raised its price target on the stock to 460p from 385p, reiterating a “Buy” rating. This bullish outlook comes ahead of IAG's June quarter earnings report, with analysts anticipating continued strong performance from the European airline group.

The stock closed out the week at 346.60p, marking a 14.5% gain year-to-date despite ongoing volatility in the global travel sector and broader economic headwinds. This brings the price close to the 350p level that has previously offered up some resistance during attempts earlier in the year.

IAG's impressive stock performance reflects a remarkable turnaround. Since June last year, a little over 12 motnh ago, the IAG share price has more than doubled, with demand for long-haul routes, industry-leading margins, lower fuel costs compared to previous years, and the sustained post-pandemic recovery in air travel all boosting sentiment.

The company's Q1 2025 results further solidified investor confidence, with operating profits surging 191% year-over-year and revenue increasing by 9.6%, exceeding market expectations.

Deutsche Bank's updated price target is among the most optimistic from major brokerage firms, reflecting a belief in IAG's ability to further improve profitability, particularly driven by the strong performance of its Iberia division.

While Deutsche Bank lowered its earnings before interest and tax estimates for IAG for 2025 and 2026 by 13% and 10%, respectively, due to concerns over transatlantic market exposure, the ‘buy' recommendation was maintained.

This sentiment aligns with a broader trend of positive analyst revisions. Jefferies Financial Group recently increased its target to 400 GBp, while Barclays raised theirs to 420p, both maintaining “Buy” or “Overweight” ratings. Morgan Stanley also boosted its target to €4.50 (approximately 380p at current exchange rates) earlier in the year.

The upcoming June quarter earnings report is expected to be a key catalyst for IAG shares. Investors will be closely watching for continued revenue growth and margin expansion, with particular attention paid to Iberia's contribution.

The airline has also resumed dividend payouts, a clear sign of financial stability and confidence in future cash generation. IAG’s strategic investments, including orders for 53 new long-haul aircraft from Airbus and Boeing, demonstrate a commitment to modernising its fleet and expanding its presence in key markets. These new aircraft are primarily intended to replace older, less fuel-efficient planes, contributing to lower operating costs and improved environmental performance.