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Ryanair Holdings PLC RYA

Rating as of

Morningstar’s Analysis

Valuation
Currency in EUR
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Ryanair Remains Optimistic About Long-Term Growth Targets; Shares Fully Valued

Joachim Kotze Equity Analyst

Analyst Note

| Joachim Kotze |

No-moat Ryanair reported an adjusted net loss of EUR 815 million for fiscal 2021, compared with EUR 1 billion profit in 2020, as passenger numbers tumbled by 81% to 27.5 million. Guidance for 80 million to 120 million passengers and break-even profit in 2022 is provided amid a highly uncertain environment. However, management remains optimistic about the group’s longer-term prospects, and maintains its 200 million passenger target for fiscal 2026. We believe the group is in a strong position to gain market share on intra-European flights, as multiple competitors fail or cut back capacity, and continue to reduce its cost base. Our forecasts assume the company achieves its longer-term guidance for passenger numbers, while the group EBIT margin expands to 18%, from 13.3% pre-COVID-19 levels, due to cost reductions. We expect to make slight changes to our forecasts, which will have a minimal impact on our EUR 14.50 fair value estimate. Shares appear fully valued, with the recovery, growth and margin expansion prospects fully discounted. We favour Wizz Air, which has a superior growth outlook and we believe is not fully appreciated by the market.

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Company Profile

Business Description

Ryanair is the leading airline group by passenger numbers in Europe. The company employs a low-cost no-frills model to offer low fares to leisure customers on short-haul intra-European routes. In fiscal year 2020, the company carried 149 million passengers, utilizing a fleet of 467 Boeing 737 aircraft across its 1,800 routes. To keep costs low the company serves predominantly lower-cost secondary airports. The company generated sales of EUR 8.5 billion in fiscal 2020.

Contact
Airside Business Park, Swords
Dublin, K67 NY94, Ireland
T +353 18121212
Sector Industrials
Industry Airlines
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 31, 2021
Stock Type
Employees 17,268

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