Ryanair Holdings plc (NASDAQ: RYAAY)
Trending stock of the day.
Ryanair Holdings plc is the parent company of Ryanair, Ryanair UK, Buzz, Lauda, and Malta Air, making it Europe's largest airline group. It is known to be Europe's cleanest and greenest airline group, with ambitious environmental targets for 2030. Ryanair provides the lowest tickets in Europe and connects over 240 destinations in over 40 countries. Having recently posted a near-record FY profit this time around, the company has seen an increase in mentions by a massive 286% over the last day, prompting investors to wonder whether they should take a position in the company now. Currently, Ryanair shares trade at $102.40 per share.
Positive Hype
There are numerous reasons for Ryanair to have gained so much positive hype over the last day, here are some of them.
Ryanair on Monday posted a near-record profit of 1.43 billion euros ($1.57 billion) in the year to end-March and said it was cautiously optimistic that profits would rise modestly in the next 12 months.
The Irish airline, Europe's largest by passenger numbers, expects summer European short-haul capacity to remain below pre-COVID levels, with peak fares trending ahead of last year, and that a continued squeeze on capacity would benefit Ryanair.
The low-cost carrier flew a record 168.6 million passengers in the year through March 31, beating its previous annual record of 149 million reached before the pandemic. Additionally, it reiterated that it hoped to grow traffic to 185 million this fiscal year.
Ryanair hiked its after-tax profit forecast to 1.325 billion to 1.425 billion euros in January after stronger-than-expected Christmas traffic and fares.
In anticipation of strong demand, Ryanair has just ordered 150 new 737 Max-10s and optioned another 150. German travel firm TUI expects strong revenue and higher profit in 2023. This will also will pave the way for the low-cost carrier to nearly double its traffic from 168 million now, to 300M by March 2034.
Negative Hype
Although most factors seem to be in favor of Ryanair as a company, here is one potential risk it might face in the near future.
The recent Boeing delivery delays may push some of that growth into the lower-yielding second half and slightly reduce the target. It expects to be short up to 10 new jets in June and July. However, this seems only like it might be a temporary problem.
Conclusion
"Our widening unit cost advantage over all competitors, our fuel hedging, strong balance sheet and our very low-cost aircraft order book, as well as our proven operational resilience, creates enormous growth opportunities for Ryanair over the coming years.” said the CEO Michael O’Leary. Given that the company has such a positive outlook for itself, that there is strong demand, and that Ryanair is also prepared for it in the long term; Ryanair Holdings plc should definitely be on your radar.
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