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Today's big stories

British Airways-owner IAG made a profit last year for the first time since the pandemic
Chipotle’s futuristic menu comes with a dollop of artificial intelligence – Read Now
Fired-up mortgage costs have made it cheaper to rent than buy in the UK

New Heights

What’s Going On Here?

IAG reported on Friday that it finally made a profit last year, but the airline group’s other announcement kept investors grounded.

What Does This Mean?

If you’ve ever scanned for European flights while dreaming of a prosecco-filled summer vacation, you’ll probably recognize some of IAG’s carriers: British Airways, Iberia, and Vueling. Well, IAG’s been flying against a headwind for some time, racking up more than $10 billion in pandemic-induced losses. But now travel-hungry freedom-seekers are booking flights like they’re going out of style, and more business travelers are swapping their shirt-on-top, underpants-on-the-bottom Zoom meeting setups for boardrooms around the globe. IAG, then, made a profit last year after two dismal ones – and with the airline group expecting a full return to pre-pandemic capacity by the end of the year, IAG reckons its profit could almost double in 2023.

Why Should I Care?

For markets: Own the Spanish sky.
IAG had another announcement: it’s buying up the rest of Spanish airline Air Europa, picking up the deal that was scuppered by the pandemic back in 2020. Now, that might sound like a prime opportunity to nab more market share in the region, but investors aren’t fully sold. See, analysts reckon IAG’s massive debt pile has been weighing on the firm’s share price, and this deal will only make the dent bigger. That might be why IAG’s stock fell on Friday, despite the tip-top results.

The bigger picture: Prepare for a slow ascent.
Mind you, IAG’s tale is hardly an original story: the airline industry took a collective blow of $200 billion in losses over the last three years, but planes all over the world are finally taking off from the tarmac. It’ll take a long time to erase the past, though: the International Air Transport Association predicts carriers will make just shy of $5 billion in profit this year, a mere fraction of the more than $26 billion they made in the heady days of 2019.

You might also like: The highs and lows of investing in the airline industry.

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Analyst Take

This Spicy Little Stock’s Got A Recipe For Growth

By Paul Allison, Analyst

You’ve probably stood in line waiting for a burrito at Chipotle, and maybe you spent the time deciding if extra guac is worth it.

Or maybe you’ve tried to figure out how many orders the store fills in a day, what the ingredients cost, and how much employees earn.

A bit of mental arithmetic and you’ve figured out the firm’s profit margins, a vital part of understanding Chipotle’s business model.

And with the chain’s record of innovation and its plans for an artificial intelligence and robotics-driven future, that could be an appetizing prospect.

That’s today’s insight: a deep dive into Chipotle’s stock.

Read or listen to the Insight here

Spring’s come early for the UK

It’s been a long ol’ winter, but there are finally signs of spring in the UK.

And we’re not just talking about the weather: the country’s chaotic mini-budget era seems like a hazy memory, and there finally seems to be a sense of blossoming calm.

Investors certainly seem a bit more upbeat: the UK’s key stock index – the FTSE 100 – just keeps setting fresh record highs, and even crept above the symbolic 8,000-point barrier.

Mind you, there’s no guarantee that the country’s back on its feet – and as always, some investments are more likely to hold up over time than others.

Handy timing, then, that IG has released its top FTSE 100 stock picks for this March.

Find Out More

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