Ryanair had its target price raised by analysts at Liberum which note pricing strength in tickets could be sustained for “some time.”
Liberum held its buy recommendation while increasing the target price to €20.5 from €19.
The budget airline was upbeat on the long-term prospects of the company, remaining hopeful that the demand/supply balance will remain in favour of the carriers.
Capacity is likely to remain constrained because of subdued production levels at Airbus and Boeing for a prolonged period, Liberum said.
German airline Lufthansa also talked about enforced capacity restraints, which means strength in the pricing environment could be sustained for some time.
With that being said, Ryanair was less upbeat in the short term, suggesting competitors were “excessively optimistic” about unit revenue for this summer.
Liberum notes this could be down to several reasons, including “Ryanair’s faster capacity growth giving it a unit revenue headwind.”
Ryanair is also sensitive to the last-minute market, with a disproportionate amount of revenue coming from passengers booking just before their trip.
Yesterday, the Irish carrier said revenues jumped 124% to €10.8bn as fares rose compared to a 75% hike in costs.
After-tax profits to recover to €1.43bn from Covid-dominated losses of €355mln the year before.