Bank of America has cut its earnings per share estimate for Ryanair for the fiscal year 2027 by about 3%, now placing it at 1.79 euros. The entity attributes this adjustment to weaker than expected first-quarter results and a less dynamic airfares scenario.
In its report, the firm details that the airline's net profit of 538 million euros was 4% below its own projection and 7% below the market consensus. However, it emphasizes that unit costs, excluding fuel, evolved better than anticipated, recording a year-on-year increase of 2%.
Regarding price evolution, the financial entity anticipates that fares will decrease by 2% in the second quarter. For the third quarter, it expects stability, and for the fourth quarter, a 4% increase.
For Ryanair, the definitive behavior of fares in the first half of the year will largely depend on the strength of last-minute bookings during the months of August and September.
Despite the relatively good performance of unit costs excluding fuel, BofA has revised down its cost increase forecast from +4.5% to +3%, thus aligning with the guidance range of the management itself, which is between +3% and +4%.
"Among the factors weighing on costs are crew expenses arising from new collective agreements, the increase in maintenance and ownership costs due to provisions for workshop overhauls of LEAP engines and more frequent inspections of NG aircraft, as well as the increase in environmental taxes," it explained in its statement.
In parallel, the entity does not contemplate new additional share buybacks this year, as the priority is to rebuild the gross cash level to 4 billion euros. "Ryanair's balance sheet remains solid," it also highlighted.
As for the ongoing buyback program, the low-cost airline has already executed approximately 90% of it, out of a total authorized amount of 750 million euros.
With this scenario, the bank maintains its target price for Ryanair unchanged at 30 euros/67.5 dollars per share and reiterates its "buy" recommendation.