Ryanair: Oddo cuts target price after profit warning
(CercleFinance.com) - Low cost airline Ryanair has cut its earnings estimates for FY to end-March, due to an expected reduction in prices over the winter months.
The Irish group now expects FY earnings of between 1 billion and 1.1 billion euros, against a previous target range of 1.1 billion to 1.2 billion euros, with winter tariffs down 7%, against a previous estimated fall of 2%.
Following this announcement, Oddo confirms its Buy rating on the stock, although has cut its target price from 18 euros to 13.2 euros. Analysts say that beyond uncertainties around Brexit, they believe that the pressure on prices will weaken small players more and will accelerate a concentration in the sector, which should benefit Ryanair, with the group enjoying the most significant comparative advantage in terms of unit costs (even including the increase in personnel costs).
Oddo has cut its 2019 estimate for net income (group share), excluding Laudamotion, by 11.5% to 1,060 million euros (including -27.7 million euros in Q3 and -132.5 million euros in Q4). The broker has adjusted its 2020 net income (group share) estimate by 10% to 1,182 million euros (vs. consensus of 1,119 million euros).
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The Irish group now expects FY earnings of between 1 billion and 1.1 billion euros, against a previous target range of 1.1 billion to 1.2 billion euros, with winter tariffs down 7%, against a previous estimated fall of 2%.
Following this announcement, Oddo confirms its Buy rating on the stock, although has cut its target price from 18 euros to 13.2 euros. Analysts say that beyond uncertainties around Brexit, they believe that the pressure on prices will weaken small players more and will accelerate a concentration in the sector, which should benefit Ryanair, with the group enjoying the most significant comparative advantage in terms of unit costs (even including the increase in personnel costs).
Oddo has cut its 2019 estimate for net income (group share), excluding Laudamotion, by 11.5% to 1,060 million euros (including -27.7 million euros in Q3 and -132.5 million euros in Q4). The broker has adjusted its 2020 net income (group share) estimate by 10% to 1,182 million euros (vs. consensus of 1,119 million euros).
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.