Canaccord drops profit estimates for Ryanair following strikes
Analysts at Canaccord Genuity dropped their target price on low-cost carrier Ryanair on Tuesday, mainly related to recent strike action.
Ryanair Holdings (CDI)
€14.41
17:14 17/12/21
Travel & Leisure
7,521.61
17:10 19/04/24
Despite Ryanair issuing a profit warning on Monday, cutting its full-year guidance from a range of €1.25bn-€1.35bn to a new range of €1.1bn-€1.2bn, the Canadian broker said the budget airline's longer-term outlook remained "attractive" given its low and sustainable cost base and a wide range of growth opportunities at primary and other airports.
Canaccord pointed out that the airline is highly profitable, with "enviously high double-digit net margins" and a consistent ability to generate an EBITDA of almost €2bn so that, despite chunky CAPEX commitments, it could continue returning cash to shareholders.
However, although Canaccord reiterated its 'buy' recommendation on the firm's shares, it reduced its target price from €19.70 per share to €16.60 on the back of the earnings downgrade and what it said was reduced short-term visibility.
"This premium is, in our view, justified by the attractive long-term growth prospects, superior margins and returns on capital, sustainable industry-leading cost base, growing exposure to primary airports and strong cash generation of the group," wrote analyst Gert Zonneveld.