Ryanair (NASDAQ:RYAAY) shares are under pressure today after the air carrier lowered its profit outlook. Citing rising fuel costs, it now expects about €1.85 billion-€1.95 billion in net profits for the full year.
In the third quarter, Ryanair flew 41.4 million passengers and clocked €15 million in net income. In comparison, it had generated a net income of €211 million in the year-ago period. However, the company’s revenue increased by 17% to €2.70 billion during this period.
The low-cost airline is facing off with online travel portals, alleging that unwarranted charges on these portals lead to higher fares. The company resorted to lower fares to attract travelers recently after some online travel agents dropped its listings.
Separately, Ryanair does not expect any disruption to its delivery schedule from the quality issues with Boeing’s (NYSE:BA) planes. Further, Michael O’Leary, the CEO of Ryanair, noted that the airline would be happy to lap up any extra Boeing planes if other Boeing customers cancel their orders. Notably, the company plans to stick with an all-Boeing fleet and aims to fly 300 million passengers by 2034 (it flew 183.5 million passengers in the current year).
Are Ryanair Shares a Good Buy?
Overall, the Street has a Moderate Buy consensus rating on Ryanair. Following a nearly 36% rally in the company’s share price over the past year, the average RYAAY price target of $136.50 points to a modest 4.9% potential upside in the stock.
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