In your morningstar article where you can see $7 as fair value price, you should be able to read their evaluation and they usually explain why they have come to that conclusion.
I am fairly certain they are factoring in the acquisition of the Wesfarmers insurance division and I believe I read somewhere that once that acquisition becomes official, that IAG moves into the top 20 stocks on the ASX, which is psychologically a big step.
After I read this and did a bit of research, I bought in last month (977 shares @ around 5.5k), which is by far the biggest splash out I've done on shares, but very confident in this one.
It's a strong, stable company which pay dividends and when I read about the Wesfarmers proposed acquisition, it was enough to get me on board. The share price is easily trending upwards but not at a ridiculous speed, which I am more comfortable with.
This stock is a no brainer imo and any price under $6 per share represents great value and can easily be the core stock in one's portfolio. I will be signing up for the DRP asap, which at current prices of .13c per share, gets me around $130 in dividends twice a year, which is around 22 shares at current prices, so each year my holdings should go up by about 45 shares, not factoring in any increases in dividend or capital gains on share price.
IAG Price at posting:
$5.86 Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)