Ryanair Valuation Premium to Airline Peers Rises, Tops EasyJet
2014-09-12 06:44:58.825 GMT
By Brian Lysaght
Sept. 12 (Bloomberg) -- Ryanair has extended its valuation
premium vs peers, highlighting the stock has recovered from a
profit warning last year that sent the airline’s shares
tumbling.
* Compared to its 5 main European rivals, Ryanair’s blended
12-month forward P/E of 14.7x is at a 39% premium to peers,
above its 20% avg. premium over the past year, according to
Bloomberg data
* EasyJet trades on 11.1x 12-month forward earnings, in line
with the past year, with Irish rival Aer Lingus on 12.2x,
Air France on 9.9x, IAG at 9x, Lufthansa 6.7x
* Ryanair has gained ~41% since a Nov. 4 profit-forecast cut
when the stock fell 12.6%; SXXP travel index up ~14% since
then
* On July 28, Ryanair raised its earnings forecast for the
current year; consensus earnings ests. call for a 28% y/y
rise in net income for current FY and 13% next year vs
EasyJet’s 13%/11% expected net income rise (NOTE: cos. have
different financial year-ends)
* Ryanair passenger traffic “growing strongly,” and recent
service enhancements are positive for yields, Cantor
Fitzgerald (buy) said in a Sept. 10 note
* Says airline’s cash flow leaves room for another special
div., even after its $22b Boeing planes order
* Ryanair has the highest consensus rating among SXXP
airlines; 76% of the 25 analyst ratings recommend investors
buy, highest percentage in the travel index
* Ryanair’s avg. PT of EU8.15 implies ~8% upside, lags
EasyJet’s ~23% upside to avg. PT
For Related News and Information:
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To contact the reporter on this story:
Brian Lysaght in London at +44-20-7330-7908 or
blysaght@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Tim Barwell, Cormac Mullen
2014-09-12 06:44:58.825 GMT
By Brian Lysaght
Sept. 12 (Bloomberg) -- Ryanair has extended its valuation
premium vs peers, highlighting the stock has recovered from a
profit warning last year that sent the airline’s shares
tumbling.
* Compared to its 5 main European rivals, Ryanair’s blended
12-month forward P/E of 14.7x is at a 39% premium to peers,
above its 20% avg. premium over the past year, according to
Bloomberg data
* EasyJet trades on 11.1x 12-month forward earnings, in line
with the past year, with Irish rival Aer Lingus on 12.2x,
Air France on 9.9x, IAG at 9x, Lufthansa 6.7x
* Ryanair has gained ~41% since a Nov. 4 profit-forecast cut
when the stock fell 12.6%; SXXP travel index up ~14% since
then
* On July 28, Ryanair raised its earnings forecast for the
current year; consensus earnings ests. call for a 28% y/y
rise in net income for current FY and 13% next year vs
EasyJet’s 13%/11% expected net income rise (NOTE: cos. have
different financial year-ends)
* Ryanair passenger traffic “growing strongly,” and recent
service enhancements are positive for yields, Cantor
Fitzgerald (buy) said in a Sept. 10 note
* Says airline’s cash flow leaves room for another special
div., even after its $22b Boeing planes order
* Ryanair has the highest consensus rating among SXXP
airlines; 76% of the 25 analyst ratings recommend investors
buy, highest percentage in the travel index
* Ryanair’s avg. PT of EU8.15 implies ~8% upside, lags
EasyJet’s ~23% upside to avg. PT
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Brian Lysaght in London at +44-20-7330-7908 or
blysaght@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Tim Barwell, Cormac Mullen