Top European Airlines Set to Soar: Bernstein Ranks 4 Buy-Rated EU Airline Stocks With Big Upside Into Winter

Investing.com -- European airline shares are entering the winter season with a split outlook, but four carriers stand out with “buy” or “outperform” ratings from Bernstein Research.

The firm’s latest Q3 2025 European Airlines Preview points to resilient earnings potential across these names, citing strong pricing power, cost control and long-haul demand as key drivers

International Consolidated Airlines Group (IAG.LN) tops Bernstein’s list as their "top pick for medium-term compounding."

The parent company of British Airways, Iberia, and Aer Lingus is forecast to deliver adjusted earnings per share of €0.68 in 2025, up from €0.55 in 2024. Bernstein has set a price target of £4.70 for the stock.

The group’s third-quarter revenue is estimated at €9.59 billion with EBIT of €2.01 billion.

IAG’s advantage stems from favorable structural trends, particularly supply and slot constraints, with the potential to return more than 50% of its market capitalization to investors over the next five years.

Ryanair Holdings (RYA.ID / RYAAY) secures the second position with an "outperform" rating and a €28 price target.

The low-cost carrier is projected to achieve adjusted EPS of €2.07 in 2025, increasing from €1.47 in 2024, with further growth to €2.24 expected in 2026.

Bernstein notes that Ryanair’s fares have increased 5% to 6% year over year in its fiscal second quarter, while full-year costs are guided to rise only 1% to 3%.

The airline’s third-quarter revenue estimate stands at €5.42 billion with net income of €1.63 billion.

Bernstein describes Ryanair as "resilient enough," benefiting from cheaper fuel and maintaining a significant cost advantage over competitors.

Wizz Air Holdings (WIZZ.LN) ranks third with an "outperform" rating and a £30 price target. The ultra-low-cost carrier is forecast to post 2025 reported EPS of €0.04 before a substantial rebound to €2.48 in 2026.

For the quarter, Bernstein estimates revenue of €1.95 billion and net income of €311 million, both exceeding consensus expectations.

The report highlights Wizz’s strategic shift away from the Middle East to focus on Central and Eastern Europe, described as "an under-penetrated region offering significant opportunities."

Lower fuel costs and reduced capital spending are expected to help Wizz reduce net debt by €1 billion and decrease leverage from 4.3× to approximately 2.3× net debt/EBITDA within two years.

Air France-KLM (AF.FP) rounds out the list with a "market-perform" rating, though Bernstein maintains a constructive outlook.

The carrier’s third-quarter EBIT forecast of €1.51 billion exceeds consensus by 10%, while net income is estimated at €998 million, up 19% year over year.

Adjusted EPS is projected at €6.21 for 2025, compared with €2.04 in 2024. The report cites easing cost pressures, improved premium-cabin demand, and strong Latin America routes as positive factors.

With cost per available seat kilometer expected to moderate in the second half, Bernstein concludes that Air France-KLM has "the most favorable outlook into Q3."

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