International Consolidated Airlines Group SA (LON: IAG) (IAG) shares have been rising ahead of the group's second-quarter results for 2021, due this Friday (30 July).
The company's shares have increased nearly 8% since the UK government lifted air travel restrictions to residents who have had their double Covid-19 vaccinations to travel to amber list countries without having to quarantine on their return to England.
IAG has a forecasted upside of 23.6% from its current price of 176p. A consensus price target of 220p by 14 research analysts.
The most recent share price forecast came from UBS Group analyst Castle Jarrod, who kept a 'buy' call and price target of 280p in early July.
How will IAG fare in Q2 earnings?
The British Airways owner is releasing its Q2 and half-year financial results for the three months ending 30 June 2021 on the last day of this week.
Although IAG noted in its Q1 update that it would not provide profit guidance for the rest of the year given the ongoing uncertainty caused by Covid-19, CEO Luis Gallego said that the company has been working towards boosting liquidity and reducing its cost base.
In response to lower passenger demand, IAG sought to increase cargo-only flights. Indeed, the number of cargo-only flights it operated increased from 969 in the previous quarter to 1,306 in the first quarter of the current year. They generated €350 million in total revenue, a record for the first quarter of the year.
'We're taking all necessary actions to ensure the financial health of our business for the long-term, including last year's successful 2.7 billion euro capital increase, and remain focused on reducing our cost base and increasing efficiencies,' said Gallego.
In the first quarter of 2021, IAG's decline in revenue contributed to a loss after tax of over €1 billion. This compares to a loss of almost €1.7 billion in the same quarter of the previous year.
Credit Suisse analysts believe that the group's total debt will peak at around 12 billion euros in Q2, with revenue increasing to three billion euros in the third quarter. This month, they lifted their price target on IAG to 256p from 228p while maintaining an 'outperform' recommendation.
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