Worldwide Consolidated Airways Group (LSE: IAG) shares doubled in worth final yr, making them the top-performing inventory on the FTSE 100. I watched their spectacular rally with a mixture of awe and remorse. By the point I severely thought of shopping for IAG, because it’s typically recognized, it felt like the prospect had gone.

However this yr has been totally different. After Donald Trump’s ‘Liberation Day’ on 2 April triggered a worldwide tariff battle, the inventory plunged again to earth.

I had a number of thousand kilos sitting in my self-invested private pension (SIPP) and, this time, I didn’t hesitate. On 10 April, I snapped up shares within the British Airways proprietor at 259p a pop.

Unmissable shopping for alternative?

It felt like I’d been handed a second shot. The identical issue that made the inventory soar final yr, the restoration in transatlantic flying, grew to become its undoing as fears grew of US islationism and recession. It regarded like a useful entry level, with Worldwide Consolidated Airways Group inventory buying and selling at a price-to-earnings ratio of 5.5.

The shares regarded staggeringly low cost, even accounting for the turbulence nonetheless to return. I’m beneath no illusions. Aviation is a dangerous enterprise at the perfect of occasions, and particularly right this moment.

Rising revenues

Full-year 2024 outcomes revealed in February confirmed indicators of energy, with income up 9% to €32.1bn. Passenger numbers and plane utilisation additionally improved, whereas British Airways accounted for greater than half the group’s complete income.

Granted, revenue margins slipped barely to eight.5%, largely on account of rising prices. That’s one thing to regulate. However general, the enterprise was flying. However 2025 is a special world. Worldwide Consolidated Airways Group is true on the frontline of the commerce battle, with vacationers abruptly cautious of visiting the US, and companies rethinking their plans.

The Q1 2025 replace is due on 9 Might, and that will give us an early glimpse of how the corporate is navigating the brand new actuality.

The airline sector stays uncovered to sharp actions in oil costs and forex shifts. In the present day’s falling oil price might assist lower prices. Howver, the foreast dip within the US greenback might hit revenues as soon as transformed again into sterling. All it takes is one uncomfortable headline to knock the inventory off track, and we’ll little question have loads of these.

Dividends and potential progress

The median IAG one-year share price forecast from 25 analysts at the moment stands at just below 380p. From right this moment’s price of round 263p, that will mark a rise of practically 45%. With dividends restored and a projected yield of three.4%, my complete return might push in direction of 50%, assuming these predictions play out. I can dream, can’t I?

Forecasts aren’t guarantees, particularly in occasions like these. Most of these estimates had been possible made earlier than the April sell-off. I believe Worldwide Consolidated Airways Group’s return to kind might take rather a lot longer than that. Time will inform. I’ve made my transfer. I’m blissful to carry and wait.

Others may even see the current drop as an invite to climb aboard. The dip seems like a second probability for buyers who’ve additionally been contemplating this restoration inventory. It calls for a robust abdomen although. I’ve fixed my seat belt. I’m on this for the lengthy haul