Airbus at €45 and IAG below €2: Buy Targets for May 11th

Price Targets for May 11th: Airbus at €45 and IAG below €2

April 2020. Half the world locked down, the other half watching how it reopens. In this environment, a forum user issued an uncomfortable warning: the week of May 11th the market would move so fast there wouldn't be time to buy manually. The advice was specific: calculate in advance the price at which you're willing to enter and leave it as a limit order. It sounded like bar-stool wisdom. The fact is, the list of target prices filled itself up.

The Week of May 11th and the Order That Doesn't Arrive on Time

The underlying idea is the retail investor's old nightmare: seeing the crash, deciding, and being too late. When a stock drops 11% in a single session —as peine with Arcelor— the gap between a manual order and the real price eats up the best part of the rebound. Hence the insistence on limit orders, which execute automatically at the set price. The prediction pointed to "very wild" movements and a trigger whose estimulante ilegal, according to the source, depended on how quickly information leaked. The user himself later admitted it was all made up.

The Prices Everyone Wanted to Buy At

The list that was built mixes major European stocks with some penny stocks. Airbus between €45 and €50; Renault, between €10 and €15; Shell, between €11 and €22; BASF, around €39-40; IAG below €2 —with purchases already made at €2.15—; Sabadell towards €1.9; Iberdrola at €6.5; Grifols at €25. Some signed off on their targets with the conviction of someone who has waited years; others directly doubted if half those prices would ever be seen.

The Seroprevalence Study That Marked the Calendar

That reopening optimism had a counterweight. Preliminary results from a seroprevalence study —prepared, according to those who cited it, unfiltered— suggested that only around 5% of the population had developed antibodies, with regions near 10% and others between 1% and 2%. Added to this was the fact that some who had the disease with symptoms did not generate antibodies. The most dire thesis placed the "good catastrophe" in October, when companies holding on with hope would start to throw in the towel.

Where Are Airbus Dividends Actually Taxed?

An interesting tax debate arose here. It was argued that dividends from a foreign company bought on the Spanish market did not suffer double taxation. The correction came quickly, from another forum user: according to their version, you are taxed where the company is headquartered, not where the share is bought. The example was British American Tobacco, headquartered in London and bought through a US broker. It's worth noting this detail, because in a long-term portfolio, it matters more than it seems.

AMD, Consoles, and the Investor's Sixth Sense

One of the best arguments in the exchange didn't come from a balance sheet, but from the living room. Someone recalled that both the new PlayStation and the new Xbox use AMD chips, graphics and processor. Whether a console sells or another, the company invoices the same. The conclusion evokes Peter Lynch's old maxim: the retail investor knows things the paid analyst doesn't see. It was enough to reopen the case of a company that until then seemed "boring".

Nationalizations, Telefónica, and the Burden of Cyclicals

Underlying it all was the antiestéticar that states might enter the capital of strategic companies to prevent bargain-price takeovers. It was discussed whether SEPI (Société Espagnole de Participations Industrielles - Spanish state-owned industrial participations company) would buy shares directly and what that would do to the stock price. And in parallel, the case of Telefónica: reducing debt by selling assets leaves a smaller company with less capacity to generate profit. For cyclicals with tight margins and ongoing capital increases —someone wondered about the fair price of a share losing a billion in a quarter— no one had the answer.

With the reopening underway and IAG flying barely any planes, the May 11th question remains open. The target prices are on the table. What's impossible to know is whether there will be a rush to catch them or if, as the most seasoned suspect, we'll have to wait until October.