Ryanair: Cutting estimates on more cautious near-term pricing. Remain OW after recent share price decline; med-term story unchanged

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Ryanair: Cutting estimates on more cautious near-term pricing. Remain OW after recent share price decline; med-term story unchanged

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fuel prices would make profit growth in Mar-28E more challenging, but could also

lead to capacity cuts elsewhere (and a benefit on pricing) if fuel remains at elevated Specialist Sales contact details:

levels. We see the medium-term ex-fuel unit cost advantage as unchanged. Our Olivia Petronilho - Specialist Sales -

Mar-28/29E net income estimates also come down by -9%/-3% respectively due European Consumer

to higher fuel costs. We remain OW and our Dec-27 price target falls by -3% to €32 (44-20) 3493-3709

(previously €33) due to lower estimates. Post the recent share price decline, we olivia.b.petronilho@jpmorgan.com

view Ryanair as a defensive play if the Middle East conflict remains unresolved Key Changes (FYE Mar)

with the ability to take structural market share; however, it can also benefit from Prev Cur Δ

stronger bookings momentum, earnings upgrades and accelerated cash returns if Adj. EPS - 27E (€) 1.98 1.75 -11.9%

Adj. EPS - 28E (€) 2.12 1.94 -8.9%

we see a lasting resolution. Adj. EBIT - 27E (€ mn) 2,254 1,976 -12.3%

Adj. EBIT - 28E (€ mn) 2,413 2,192 -9.2%

• (1) Softer summer pricing & caution on winter. Ryanair now expects Q2

fares down modestly versus prior year compared to 'broadly flat’ previously Style Exposure

(although MOL described fares as down LSD-MSD% on the call). Close-in

demand reportedly saw a small uptick off the back of the prior ceasefire, but

not enough to offset the prior stimulation required. In our view, the incremental

softness could be explained by multiple factors coinciding, including an over-

optimistic guide, the World Cup, extreme heatwaves in Europe, some over-