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Ryanair Declines 42% in a Year: What's Ailing the Stock?

Shares of Ryanair Holdings RYAAY have lost 41.6% in a year’s time compared with the industry’s 15.7% decline.

One-Year Price Performance

 

During fiscal 2019 (ended Mar 31, 2019), Ryanair’s full-year profit (excluding LaudaMotion) declined 29% to €1.02 billion due to a 6% decline in airfares. Unit costs, excluding fuel, rose 5% due to higher labor costs among other factors. Capital expenditures during the period were in excess of €1.5 billion. Net debt increased year over year to €450 million.

Ryanair's labor agitation continues to cause flight cancellations that are hampering bookings. Moreover, the company is concerned about a Brexit-related impact.

These headwinds have compelled the company to issue a bleak outlook for fiscal 2020. Fuel costs are anticipated to escalate by €460 million and push up total expenses. Meanwhile, non-fuel unit costs are projected to ascend 2% due to delivery delays of the B737 MAX aircraft and other factors. Notably, the carrier has delayed the delivery of first 5 B737-MAX aircraft till the winter season. Group profits are estimated to be largely flat year over year.

The fact that the Zacks Consensus Estimate for fiscal 2020 earnings has been revised downward to the tune of 27.4% over the past 60 days, highlights the negativity surrounding this Zacks Rank #5 (Strong Sell) stock.

Stocks to Consider

Investors interested in the broader Transportation sector may consider SkyWest SKYW, GATX Corp. GATX and Fly Leasing Ltd. FLY. While SkyWest and GATX carry a Zacks Rank #2 (Buy), Fly Leasing sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest have surged more than 34% so far this year. Meanwhile, GATX and Fly Leasing flaunt an encouraging earnings history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters.

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SkyWest, Inc. (SKYW): Free Stock Analysis Report
 
Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report
 
GATX Corporation (GATX): Free Stock Analysis Report
 
Fly Leasing Limited (FLY): Free Stock Analysis Report
 
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