Ryanair share price forecast: Is the airline up for new highs?
The stock of Irish cheap-fares airline Ryanair put up a rather volatile performance over its most recent one-year period due to several headwinds.
First, the company’s shares – traded on the Euronext Dublin as RYA and on the Nasdaq as RYAAY – delisted from the London Stock Exchange (LSE) in November 2021 due to compliance issues related to Britain’s exit from the European Union (EU).
Second, the airline’s business took a hit amid the increasing infection rates from the Omicron variant and the more-stringent travel restrictions imposed towards the end of 2021.
Let’s take a look at the company’s overall performance over the past year and consider the factors likely to drive the stock forward to help you build a plausible Ryanair share forecast.
Ryanair stock analysis: Can the Irish airline look past the volatility?
Ryanair stock rose by more than 13% over the most recent one-year period, as of 2 February. The Nasdaq Composite, where the airline’s stock is listed, added nearly 9% in the same period. The stock closed at a price of $116 on 1 February.
According to the Ryanair stock technical analysis (as of 2 February), the relative strength index (RSI) was pointing to ‘neutral’ at 59.94. However, the stock’s moving average convergence divergence (MACD) level gave a ‘sell’ signal based on a reading of 1.28.
The stock was trading above its 200-day moving average at $110, which could serve as a support area to watch.
Taking a look at the Ryanair historical stock price, RYAAY's last peak and the highest high in the entire 2021 period was $126.12 on 8 November 2021, a level last seen back in 2018.
Will the stock manage to retest its high and go up through the $125 level again in 2022? Let’s consider the airline’s fundamentals.
Ryanair stock fundamental analysis: Latest earnings and FY22 outlook
The Irish airline reported financial results for its fiscal third-quarter FY22 on 31 January 2022.
During the three-month period, the airline witnessed a 286% surge in its customer traffic, which hit 31.1 million (at an 84% load factor) in fiscal Q3 FY22 from 8.1 million for the same period year ago (at a 70% load factor). This surge in traffic raised the airline’s revenue by 331% to €1.47bn ($1.66bn; £1,22bn) from €0.34bn during the corresponding previous-year period reported.
However, the airline’s traffic got dragged down by the emergence of the new Omicron variant and the return of travel restrictions in early December 2021. The higher number of infections took a toll on Christmas and New Year bookings. In addition, the airline’s average fares in the fiscal quarter were €25, marking a decline of 24% from the same quarter pre-pandemic.
The airline narrowed its net loss of €96m from €321m in the previous-year period.
Ryanair reported a rather uncertain guidance for pricing and yields for the remainder of FY22, according to its earnings release. The company said that despite improved bookings due to eased travel restrictions, the booking curve “remains very late and close in”.
Ryanair share-price news: New routes and special offers
The airline has taken several measures to boost its profitability over the past few months, from adding new routes to new marketing strategies for increasing sales and customer traffic.
First, the company has added two new routes, one from Manchester to Menorca for S’22, as announced on 18 January, and second from Manchester to Genoa for S22, as announced on 14 December 2021.
These steps were aimed to boost the firm’s customer traffic on the aforementioned routes.The Manchester to Menorca flights will operate twice weekly from May while the Manchester to Genoa flights will operate twice weekly from April.
Second, the airline also launched a special seat sale for single persons who wish to book a flight with the airline on Valentine’s day. The marketing campaign is aimed at solo travelers who can pay as low as £16.99 ($23.05, €20.36) to European destinations such as Vienna or Paris, as the company announced on 26 January.
Ryanair (RYAAY) share price forecast: What are analysts saying?
Are Ryanair shares a ‘buy’, ‘sell’ or ‘hold’? Analyst ratings compiled by MarketBeat shared different price targets for the Ryanair stock. The consensus rating was ‘buy’ based on 18 analyst views as of 2 February.
Out of the 18 analysts covering the stock, 13 rated it as a ‘buy’, while the remaining five rated it a ‘hold’. These analysts included Morgan Stanley, UBS group, JPMorgan Chase & Co, Credit Suisse Group, HSBC, The Goldman Sachs Group, Bank of America and BNP Paribas, among others.
The analysts’ consensus 12-month RYAAY share price target was $104.87. It had a downside potential of 9.6% based on the closing price of $116 on 1 February. The stock projection varied from the low-price target of $21 to a high of $150.
American credit rating agency Fitch Ratings also revised the company’s outlook to ‘stable’ from ‘negative’, and affirmed the airline's long-term issuer default rating (IDR) at 'BBB' on 18 November 2021. The upgraded outlook was a result of expectations of eased travel restrictions in Europe.
Speculating on Ryanair’s future performance, Mikhail Karkhalev, analyst at Capital.com, said that airlines, along with travel and retail businesses, were among the hardest-hit sectors during the pandemic. He warned that “until all restrictions are lifted, growth in airline stocks will be subdued”.
Karkhalev added: “However, once the pandemic is over and passenger traffic rises sharply, their profits will rise as well, leading to a more dynamic rise in stocks. Air carriers are one of the most undervalued industries in the economy today.
According to the algorithm-based Ryanair share forecast from Wallet Investor, as of 2 February, RYAAY stock could reach an average price of $122.139 by the end of December 2022. The service suggested the stock could be valued at $136.024 by the end of December 2023, $150.497 by the end of 2024, and $164.492 by the end of 2025.
Wallet Investor did not provide stock-price targets for the RYAAY stock for 2030, but its longer-term Ryanair share price prediction expected the price to hit $178.557 in December 2026 and $179.959 in January 2027.
When looking for Ryanair stock predictions, it’s important to bear in mind that analysts’ forecasts can be wrong. Projections are based on making fundamental and technical studies of the RYAAY stock performance. Past performance is no guarantee of future results.
It is important to do your own research, and remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. Remember, you should never invest money you cannot afford to lose.
FAQs
Is Ryanair stock a good investment?
This all depends on your own investment objectives and the research you have carried out on the stock. Remember, it’s very important to form your own opinion of a company’s prospects and its likelihood of achieving analysts’ targets.
Why has the Ryanair share price been going up?
Airline stocks, including Ryanair, were severely hit by the Covid-19 pandemic and travel restrictions, but the stocks are recovering as travel restrictions are easing.
Will Ryanair stock go up or down?
Many factors dictate whether a company’s stock price rises or falls. Some of these are dependent on the company’s performance, while others are affected by wider macro-economic factors. You need to remember that there are no guarantees as markets are volatile.
Should I buy Ryanair shares now?
Consider doing your own research on the Ryanair stock to decide whether it fits your investment portfolio.
Where are Ryanair shares listed?
Ryanair is an Irish airline with a primary listing on the Euronext Dublin under the ticker symbol RYA. Ryanair’s American depositary shares are listed on the Nasdaq as RYAAY.
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