I spent a good chunk of 2022 staring at the IAG (LSE: IAG) share price wondering what to make of it.

Pandemic lockdowns were largely over, people had started flying again, optimism was in the air, and so were aeroplanes. Yet IAG shares remained grounded. That baffled me, because they were still dirt cheap, trading at just three or four times earnings.

There were reasons, of course. The British Airways owner had run up a mountain of debt during the pandemic, as it had to pay staff and service aircraft, without revenues coming in.

As its shares drifted sideways, my attention drifted elsewhere. Such is the way of these things, the IAG share price took off the moment I turned my back.

This airline stock has taken wing!

And it’s still flying today, and my heart sinks at the sight of it. It’s up 82.95% over two years, and 47.12% over 12 months. The shares even climbed in October, when most of my portfolio plunged.

This leaves me with a choice. I either get over it and look elsewhere for opportunities, or hop on board.

IAG’s shares still look dirt-cheap. The price-to-earnings ratio is staggeringly low at just 4.97 times trailing earnings, a third of the FTSE 100 average of around 15 times.

The stock also looks like a fabulous bargain as measured by its price-to-revenue ratio of 0.4. That suggests investors are paying 40p for each £1 of shares today. This suggests that earnings have kept pace with the share price.

IAG hasn’t paid any dividends for the four years since 2020, but that’s changing too, and at speed. Analysts predict a yield of 2.81% across 2024, rising to 3.97% in 2025.

Net debt is still a drag though. That’s forecast to be €8.01bn in 2024, although IAG is expected to whittle that down to €7.32bn in 2025.

It’s one of the cheapest FTSE 100 stocks

Labour hiked air passenger duty in its Budget on 30 October, but the increase was fairly modest given that IAG isn’t in the private jet market. A bigger worry is that rival airlines have reported softer ticketing prices. That’s hit sentiment towards the sector. The cost-of-living crisis isn’t over yet.

The struggling Chinese economy continues to weigh on the global economy, and Beijing’s recent stimulus delivered little beyond a short-lived jolt. On the plus side, fuel prices are falling, and Middle East tensions appear to be contained for now.

If either of those were to reverse, the IAG share price could feel the heat. Airlines are on the front of every geopolitical threat. As well as extreme weather, and we’re getting our share of that at the moment. 

The British Airways brand has lost its lustre, so IAG needs to sort that out.

The 26 analysts suffering one-year share price forecasts for IAG have set a median target of 249.2p. That would mark an increase of almost 20% from today’s 209.8p, should it happen. Yet can IAG really continue its current rate of ascent? I typically prefer to buy stocks on weakness rather than strength, and for that reason alone, I won’t buy it today. It’s a close call though and I may end up kicking myself all over again.