Ryanair had settled in nicely as the top dog on the Iseq in Dublin this year after the exits of former index heavyweights CRH and Flutter Entertainment from the Irish market.
The group had even briefly breached the €21 a share price level in April – which if sustained for 28 days on the trot would secure a €100 million stock bonus for its chief executive of three decades Michael O’Leary.
However, Ryanair’s share price slumped earlier this week – with the carrier losing 17 per cent of its value on Monday alone after first-quarter profits missed estimates and the outlook spooked investors. That saw it knocked off the top spot on Tuesday briefly by Kingspan.
Kingspan ended that session with a market value of close to €15.5 billion, eclipsing Ryanair’s €15.3 billion market cap as the budget airline’s shares hit a 52-week closing low of €13.62.
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Ryanair’s comments that its fares had plunged 15 per cent in the three months through June and were expected to be “materially lower” for the remainder of the summer – and that this was being experienced across the industry as consumers were under pressure – caught investors off guard.
They were even more baffled when two days later rival EasyJet said its fares the June quarter had only dipped 1 per cent and that it expects this trend to continue through the summer.
“A difference of this magnitude between Europe’s two largest point to point airlines is surprising. The networks are not identical, but Ryanair is a major player in most of Easyjet’s main markets,” said Alex Irving, an analyst with Bernstein in a note to clients on Friday. “Ultimately we see fare trends between the two as likely to converge.”
While analysts took red pens to their earnings forecasts and price targets for Ryanair’s stock, the average new goal points to 27 per cent upside from current levels and a market value for the group of €20.4 billion in the next 12 months. It closed on Friday at €16.9 billion.
Kingspan, which has advanced 16 per cent over past year, only has about 6.5 per cent upside from here, according to the average price objective – pointing to a market cap of €16.2 billion, compared to €15.2 billion, currently.
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