IAG:LSEInternational Consolidated Airlines Group SA Analysis

IAG trades at a **trailing P/E of just 5.9x**, far below the industry average of 29x, and the DCF model suggests a fair value of about £525, implying roughly 42% upside from the current £353 price. The balance sheet shows **£8.3bn in cash versus £14.3bn of debt**, yielding a high leverage ratio but a modest debt‑to‑equity of 188% and a robust **ROE of 48%**, indicating strong profit generation on equity. Cash conversion is healthy with operating cash flow of £6.6bn and free cash flow of £2.2bn, supporting a **2.37% dividend yield** and a low payout ratio of 15.5%, which suggests the dividend is sustainable.
Technical signals are mixed: the 20‑day SMA sits at £405, the price is below both the 20‑day and 50‑day averages, the RSI is in oversold territory at 33, while the MACD histogram remains negative, pointing to short‑term bearish momentum but potential for a rebound from the identified support at £343. Recent news highlights a strong 2025 earnings recovery and analyst consensus of a “buy” rating, reinforcing the fundamental upside despite the recent price wobble.