DJ Ryanair Stock Soars as Budget Airline Defies Sector Turbulence -- Barrons.com
By Callum Keown
Ryanair stock soared on Friday as the low-cost airline raised its full-year profit guidance after a strong holiday period.
The Irish budget carrier raised its earnings guidance to a range of EUR950 million to EUR1.05 billion, from a previous forecast of EUR800-900 million.
The company said it enjoyed a stronger than expected Christmas and New Year travel period and forward bookings for January to April were also up 1% on the previous year. The stock climbed 7.5% in early trading to its highest level since June 2018. Shares have now climbed 93% since four-year lows of EUR8.50 in August.
A profit beat in November from a strong first half of the year helped the shares move higher despite the continuing delays to Boeing 737 Max deliveries. Chief Executive Michael O'Leary described the 737 Max as a "game-changer" as it has more seats and burns less fuel. However, the grounding of the model after two crashes in the space of five months means Ryanair is still waiting for the aircraft. As a result, it has planned to close a number of loss-making bases this winter and cut pilot and cabin crew jobs.
But the stock and the company have come through the turbulence, also caused by Brexit uncertainty and shifting attitudes to flying amid climate change awareness. Laudamotion, the company's Austrian subsidiary, continues to underperform however, and Ryanair said net losses would widen to EUR90 million for the year.
Looking ahead. Ryanair raising its profit guidance to above the EUR1 billion mark has certainly impressed investors as shares took off on Friday. Full-year traffic is also expected to grow, above forecasts, to 154 million passengers, along with average fares moving higher.
Ryanair's third-quarter update at the beginning of February will reveal further details and perhaps an update on the Boeing 737 Max situation. Regardless of the troubled aircraft, Ryanair's direction of travel remains upward.
(END) Dow Jones Newswires
January 10, 2020 06:28 ET (11:28 GMT)
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