On Monday, Evercore ISI sustained its "In Line" rating and a $155.00 price target for Ryanair shares, traded on NASDAQ:RYAAY. The airline reported a loss of $1.31 per American Depositary Share (ADS) for the fourth quarter of fiscal year 2024, which ended in March.
This performance was slightly better than Evercore ISI's anticipated $1.40 loss per ADS. The smaller loss was attributed to a 19% year-over-year increase in base fares, surpassing analyst expectations of a 13% rise.
Ryanair experienced growth in the March quarter, with passenger volume up by 5% and total revenue per passenger increasing by 12%. Overall, total revenue rose by 17%, a boost partly due to the timing of Easter. Despite this, the airline anticipates lower base fares year-over-year and a decline in profits for the June quarter (F1Q) due to the Easter shift dynamic.
Moreover, Ryanair has adjusted its expectations for peak summer fares in the second quarter, spanning July through September, predicting a flat to 5% increase year-over-year, a revision from the previously forecasted 5-10% growth.
The airline's financial position remains robust, with a net cash balance of €1.4 billion. Ryanair's near-term capital expenditure (CapEx) is expected to moderate, with €2.3 billion forecasted for fiscal year 2025 and approximately €1.1 billion for fiscal years 2026 and 2027. This outlook allows the company to focus more on shareholder returns, as evidenced by the €700 million buyback program announced in the morning.
In light of the recent financial results and forecasts, Evercore ISI has adjusted its earnings per ADS projections for Ryanair. The firm now expects earnings of $10.15 per ADS for fiscal year 2025 and $12.00 per ADS for fiscal year 2026, revised from the previous estimates of $11.60 and $12.50, respectively.
InvestingPro Insights
As Evercore ISI maintains its stance on Ryanair with a solid price target, it's noteworthy to consider the financial health and market position of the airline through the lens of real-time data and expert analysis from InvestingPro. Ryanair's financial prudence is evident, as the airline holds more cash than debt, a sign of a robust balance sheet. Moreover, the company's ability to generate a high shareholder yield is indicative of its commitment to returning value to its investors.
InvestingPro data highlights a market capitalization of $22.73 billion, with a price-to-earnings (P/E) ratio of 14.21, which adjusts to an even more attractive 10.11 when considering the last twelve months as of Q3 2024. This positions Ryanair as trading at a low earnings multiple, suggesting potential value for investors.
A PEG ratio of 0.21 during the same period signals that the stock may be undervalued relative to its earnings growth prospects. Revenue growth also remains strong, with a 29.85% increase over the last twelve months as of Q3 2024, further cementing the airline's upward trajectory in the market.
For those looking to delve deeper into Ryanair's prospects, InvestingPro offers additional insights. There are more InvestingPro Tips available that can further guide investment decisions, including analyses on sales growth expectations for the current year and the company's ability to cover interest payments with its cash flows. To access these expert tips and more, visit https://www.investing.com/pro/RYAAY and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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