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Ryanair Narrows Loss, Issues Upbeat Traffic Outlook

Irish budget carrier Ryanair (RYAAY) reported a fiscal 2022 loss that was narrower than the previous year. The company also issued upbeat traffic guidance for fiscal 2023. Ryanair’s report is for the 12 months ended March 2022. 

Earnings Numbers at a Glance

Revenue jumped to €4.8 billion from €1.64 billion the previous year. The €355 million loss was less than the street estimates of a €370 million loss and narrower than the €1.02 billion loss for the previous year.

Outlook 

Ryanair flew 97 million passengers in fiscal 2022. It expects to fly 165 million passengers in fiscal 2023, compared to its pre-pandemic peak of 149 million passengers. The airline expects a return to reasonable profitability in the current fiscal year. 

Wall Street’s Take

Wall Street is cautiously optimistic about Ryanair stock with a Moderate Buy consensus rating, based on one Buy. The average Ryanair price target of $125 implies about 54% upside potential to current levels. 

Hedge Funds 

The TipRanks’ Hedge Fund Trading Activity tool shows that confidence in RYAAY is currently Very Positive, as four hedge funds increased their cumulative holdings of the stock by 1.3 million shares in the last

Key Takeaway for Investors

Although market conditions remain challenging for airlines amid the war in Ukraine, inflation, high fuel prices, and COVID-19 resurgence, Ryanair is managing through these problems fairly well. The airline has hedged 80% of its fuel demand for fiscal 2023 at a significant discount. Additionally, the company has hedged 10% of its fiscal 2024 fuel demand. The soaring cost of fuel has become a major burden for airlines, and the hedge means Ryanair can better control its costs and improve margins. 

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