Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Bernstein SocGen Group raised its price target on Ryanair (NASDAQ:RYAAY) to $68.00 from $63.00 while maintaining an Outperform rating. The airline, currently valued at $31.5 billion, has demonstrated strong financial health according to InvestingPro analysis, with a "GREAT" overall score of 3.56.
The firm cited easier year-over-year comparisons for the airline, noting that last year Ryanair faced its most challenging period after severing ties with online travel agencies (OTAs), which resulted in significant fare declines of -14% in FQ1 and -7% in FQ2.
Ryanair is guiding for FQ2 fares to increase 5% to 6%, nearly offsetting last year’s drop, while full-year costs are expected to rise modestly between 1% and 3%.
Environmental costs remain the largest headwind at €1.1 billion this year, with additional pressure from rising route charges and labor costs, though fuel cost improvements help the overall financial picture.
Looking toward winter, intra-European market capacity is scheduled to increase 6% year-over-year, creating some yield pressure, but Bernstein notes Ryanair maintains an advantage through its extensive network and lower cost structure compared to competitors.
In other recent news, Ryanair reported a 2.5% increase in passenger numbers for July, totaling 20.7 million travelers with a load factor of 96%. The company remains on track to meet its fiscal year 2026 guidance of 206 million passengers, aligning with market consensus expectations. Additionally, Ryanair’s forward bookings have increased by about 1% compared to last year, with average fares recovering from a previous 7% decline. The airline anticipates fares to rise by approximately 7% this year.
Ryanair also announced plans to reduce its winter 2025 capacity in regional Spain by 41% and in the Canary Islands by 10%, citing high airport charges from operator Aena as the reason. In terms of fleet expansion, Ryanair expects to receive its first Boeing 737 MAX 10 jets on schedule in early 2027, marking a shift from earlier uncertainty expressed by CEO Michael O’Leary. However, Goldman Sachs recently downgraded Ryanair’s stock rating from Buy to Neutral, citing a "less differentiated" earnings outlook compared to consensus estimates. The investment bank also lowered its price target for Ryanair to EUR27.50 from EUR29.50.
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