Ryanair: Analysts Cautious Following ‘Disappointing’ Commentary

Ryanair (LON: RYAAY), the European budget airline known for its aggressive pricing strategy, is facing scrutiny from analysts, with one citing “disappointing” commentary from select low-cost airlines and package holiday operators.

With Ryanair shares down more than 10% so far in 2024, analysts at UBS and Deutsche Bank have moved to downgrade the stock.

In a note Wednesday, UBS downgraded the low-cost airline to Neutral from Buy, lowering the price target to EUR 20 from EUR 24.

The investment bank said the share price decline this year is based on investor concerns over pricing. They also said data for certain airlines, such as Ryanair, underpins this pricing weakness, noting the disappointing commentary. As a result, UBS adjusted its forecasts to mirror the trend and said it expects downward revisions to consensus into the summer season.

In early May, shares in Ryanair fell more than 9%, leading the European airline sector lower after the company's CEO, Michael O'Leary, stated that ticket prices were probably going rise by less this summer than previously expected.

Meanwhile, Deutsche Bank also cut Ryanair to Hold from Buy in a client note in late May. The bank's analysts said they believe customers are pushing back against price rises. Therefore, Deutsche Bank now assumes Ryanair's fares per passenger are flat year-over-year in fiscal 2025.

Also in May, Morgan Stanley, JPMorgan, and Barclays all cut their price targets for Ryanair shares, although the analysts at those banks maintained their Overweight rating on the stock.