Ryanair Earnings Growth to Slow – Goldman Sachs

Goldman Sachs analysts foresee a slowdown in Ryanair's (NASDAQ: RYAAY) earnings growth, citing a more challenging business environment in a note to clients Thursday.

According to Goldman Sachs, which hosted Ryanair at its Business Services, Leisure, and Transport Conference, “there is a more challenging trading environment with ex-fuel unit cost pressure on the one hand, whilst volumes require price stimulation.”

This pressure is expected to cause Ryanair's earnings growth to slow. Goldman Sachs said its FY26 net profit estimate reflects this, putting it “slightly below consensus.”

However, Goldman Sachs believes that the market has already factored in the anticipated slowdown in Ryanair's earnings growth. This is evident from Ryanair's current valuation of “8x CY24E P/E.”

Looking ahead, Goldman Sachs remains optimistic about on Ryanair's free cash flow generation. They expect the company to generate “a third of its market cap in FCF over FY25-27E.” This strong free cash flow potential is a key reason why Goldman Sachs maintained its “Buy” rating on Ryanair shares.

Earlier this month, Barclays and UBS downgraded Ryanair's shares.

Barclays cut the low-cost airline's stock to Equal Weight from Overweight, lowering the price target to EUR 18.50 from EUR 25 apiece.

The bank noted that European low cost carrier revenue trends are proving less dynamic than anticipated. These trends will result in less weakening for upscale carriers and more for ultra-low-cost carriers, Barclays states.