Ryanair Holdings plc RYAAY is benefiting from the improvement in traffic from the pandemic-led slump. Measures to expand its fleet and bring down debt levels are encouraging too.
Against this backdrop, let’s look at the factors that make this stock an attractive pick.
What Makes RYAAY an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse over the past six months. Shares of RYAAY have gained 38.7% over the past six months compared with the 6% rise of the industry it belongs to.
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Solid Zacks Rank: RYAAY has a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 90 days, the Zacks Consensus Estimate for RYAAY’s 2023 and 2024 earnings has moved up 20.8% and 15.6%, year over year, respectively.
Positive Earnings Surprise History: RYAAY has an impressive earnings surprise history. The company delivered an earnings surprise of 7.51% in the last four quarters, on average.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For 2023 and 2024, RYAAY’s earnings are expected to grow more than 100% and 1.93% year over year, respectively.
Growth Factors: An improvement in Ryanair’s traffic from the pandemic-led slump is encouraging. In February 2023, RYAAY flew 10.6 million passengers, higher than the 8.7 million flown a year ago. The load factor (% of seats filled by passengers) was 92% in February 2023 compared with 86% a year ago.
Ryanair now aims to increase its traffic in fiscal 2023 to 168 million, indicating 13% growth from the pre-COVID traffic numbers. The prior view was 165 million. Riding on the buoyant traffic scenario, RYAAY lifted its forecast for fiscal 2023 profitability.
Measures to expand its fleet to cater to the improvement in travel demand are encouraging. In fiscal 2022, the airline took delivery of 61 B737-8200 jets. It expects to have more than 70 of these jets in its fleet for the peak summer season. The remaining jets are expected to be delivered by the end of fiscal 2025. Efforts to bring down debt levels are encouraging too.
Other Stocks to Consider
Some other top-ranked stocks from the broader Zacks Transportation sector are Copa Holdings, S.A. CPA, Alaska Air Group, Inc. ALK and American Airlines AAL. Copa Holdings presently sports a Zacks Rank #1, while Alaska Air and American Airlines currently carry a Zacks Rank #2.
Copa Holdings has an expected earnings growth rate of 39.83% for the current year. CPA delivered a trailing four-quarter earnings surprise of 33.35%, on average.
The Zacks Consensus Estimate for CPA’s current-year earnings has improved 21.1% over the past 90 days. Shares of CPA have soared 3.5% over the past three months.
Alaska Air has an expected earnings growth rate of 32.64% for the current year. ALK delivered a trailing four-quarter earnings surprise of 8.98%, on average.
The Zacks Consensus Estimate for ALK’s current-year earnings has improved 11.4% over the past 90 days.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.
The Zacks Consensus Estimate for AAL’s current-year earnings has improved 31.1% over the past 90 days. Shares of AAL have gained 11.2% over the past three months.
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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
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