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Ryanair EPS Estimates Southbound: Should You Avoid the Stock?
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Key Takeaways
Ryanair trims fiscal 2027 traffic guidance to 214 million passengers from 216 million amid high fuel costs.
Ryanair's strong cash, debt repayments and active buybacks support its position amid rising travel demand.
RYAAY stock has lost so far this year, underperforming its industry and peers like ALK and ALGT.
European carrier, Ryanair Holdings (RYAAY - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option. The negative sentiment surrounding RYAAY stock is evident from the fact that the Zacks Consensus Estimate for the third quarter of 2026 and the fourth quarter of 2026 earnings has been revised downward in the past 90 days. The consensus mark for 2026 and 2027 earnings has also been projected downward in the same time frame.
The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Image Source: Zacks Investment Research
Given this backdrop, the question now arises whether it is worth buying, holding, or selling the Ryanair stock at current prices. Let us delve deeper to find out.
Headwinds Bothering RYAAY Stock
Concurrent with the August traffic numbers on Sept. 2, 2026,Ryanair unveiled a disappointing traffic outlook for fiscal 2027. Ryanair reduced its fiscal 2027 traffic forecast from 216 million to 214 million passengers to minimize the company’s exposure to unhedged high fuel prices during the upcoming winter months (November 2026 to March 2027). RYAAY is expecting traffic to be flat year over year between November 2026 and March 2027.
RYAAY anticipates this winter schedule trimming of traffic outlook should also reduce the company’s winter losses by an estimated €70 million to €100 million. Management also assumes that high unhedged fuel costs this winter imply short-haul airfares to rise significantly across the sector.
Despite Ryanair’s encouraging monthly traffic numbers so far this year, a downbeat guidance always acts as a negative indicator on the company’s prospects.
Apart from the aforesaid trimmed fiscal outlook, RYAAY continues to grapple with production delays at Boeing and escalated operating expenses. Production delays at Boeing have been hurting the fleet-related plans of most airline companies, and it is no different for RYAAY. The company is actively in talks with Boeing leadership to speed up aircraft deliveries and has also visited Seattle at the beginning of January. Although B737 production is recovering from Boeing’s strike in late 2024, it is still slow to deliver sufficient aircraft ahead of the summer season of fiscal 2026. Additionally, Boeing continues to expect the MAX-10 to be certified in late summer 2026, followed by the delivery of the first 15 MAX-10s in Spring 2027 (with 300 of these fuel-efficient aircraft deliveries due by March 2034).
Escalating operating expenses due to high staff costs and higher air traffic control fees are hurting Ryanair’s bottom line. Total operating expenses increased 11% year over year during the first quarter of fiscal 2027. Fuel and oil costs rose 16% year over year, as the price of the company’s 20% unhedged fuel more than doubled during the quarter. Higher environmental taxes and a 6% increase in flight hours added pressure. Depreciation climbed 21% from the year-ago reported quarter, reflecting 29 additional Boeing 737-8200 aircraft, greater utilization and higher maintenance provisions. Route charges rose 8%, while maintenance, materials and repair expenses increased 30% because of fleet growth, labor inflation and greater aircraft usage. High costs naturally put pressure on margins.
RYAAY’s Price Performance
Shares of RYAAY have declined in double digits so far this year. The disappointing price performance resulted in RYAAY underperforming the Zacks Airline industry in the said time frame. Additionally, RYAAY’s price performance looks unfavorable compared to that of other airline operators like Alaska Air Group, Inc. (ALK - Free Report) and Allegiant Travel Company (ALGT - Free Report) in the same timeframe.
RYAAY Stock’s YTD Price Comparison
Image Source: Zacks Investment Research
Unattractive Valuation Picture for RYAAY Stock
Ryanair looks expensive from a valuation standpoint. Considering the forward 12-month price-to-sales ratio (P/S-F12M), the company is trading at a premium compared to the industry.
The stock has a forward 12-month P/S-F12M of 1.50X compared with 0.52X for the industry over the past five years. These factors indicate that the stock’s valuation is unattractive.
RYAAY P/S Ratio (Forward 12 Months) Vs. Industry
Image Source: Zacks Investment Research
Not an Opportune Time to Buy Ryanair Stock
High unhedged fuel costs are acting as a bane for Ryanair’s growth prospects. The upward movement in oil prices (all thanks to the ongoing global uncertainty) is naturally hurting the bottom line of airlines because fuel expenses represent a key input cost for airlines. With most U.S. carriers having abandoned fuel hedging strategies, such oil supply disruption has left them fully exposed to price spikes.
Production delays at Boeing have been hurting the fleet-related plans of most airline companies, and it is no different for RYAAY. Escalating operating expenses due to high fuel costs, staff costs and higher air traffic control fees are likely to hurt Ryanair’s bottom line. High costs naturally put pressure on margins. Share price volatility continues to be another concern. Collectively, the aforesaid factors diminish RYAAY’s appeal as an investment at this juncture.
The negativity surrounding the stock outweighs the positives like the upbeat traffic scenario, fleet expansion efforts, solid balance sheet and consistent efforts to reward shareholders through dividends and share buybacks. So, the stock appears to be a risky bet for investors. The stock’s current Zacks Rank #4 (Sell) justifies our analysis.
View the Zacks #1 Rank List
Image: Bigstock
Ryanair EPS Estimates Southbound: Should You Avoid the Stock?
Key Takeaways
European carrier, Ryanair Holdings (RYAAY - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option. The negative sentiment surrounding RYAAY stock is evident from the fact that the Zacks Consensus Estimate for the third quarter of 2026 and the fourth quarter of 2026 earnings has been revised downward in the past 90 days. The consensus mark for 2026 and 2027 earnings has also been projected downward in the same time frame.
The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Given this backdrop, the question now arises whether it is worth buying, holding, or selling the Ryanair stock at current prices. Let us delve deeper to find out.
Headwinds Bothering RYAAY Stock
Concurrent with the August traffic numbers on Sept. 2, 2026,Ryanair unveiled a disappointing traffic outlook for fiscal 2027. Ryanair reduced its fiscal 2027 traffic forecast from 216 million to 214 million passengers to minimize the company’s exposure to unhedged high fuel prices during the upcoming winter months (November 2026 to March 2027). RYAAY is expecting traffic to be flat year over year between November 2026 and March 2027.
RYAAY anticipates this winter schedule trimming of traffic outlook should also reduce the company’s winter losses by an estimated €70 million to €100 million. Management also assumes that high unhedged fuel costs this winter imply short-haul airfares to rise significantly across the sector.
Despite Ryanair’s encouraging monthly traffic numbers so far this year, a downbeat guidance always acts as a negative indicator on the company’s prospects.
Apart from the aforesaid trimmed fiscal outlook, RYAAY continues to grapple with production delays at Boeing and escalated operating expenses. Production delays at Boeing have been hurting the fleet-related plans of most airline companies, and it is no different for RYAAY. The company is actively in talks with Boeing leadership to speed up aircraft deliveries and has also visited Seattle at the beginning of January. Although B737 production is recovering from Boeing’s strike in late 2024, it is still slow to deliver sufficient aircraft ahead of the summer season of fiscal 2026. Additionally, Boeing continues to expect the MAX-10 to be certified in late summer 2026, followed by the delivery of the first 15 MAX-10s in Spring 2027 (with 300 of these fuel-efficient aircraft deliveries due by March 2034).
Escalating operating expenses due to high staff costs and higher air traffic control fees are hurting Ryanair’s bottom line. Total operating expenses increased 11% year over year during the first quarter of fiscal 2027. Fuel and oil costs rose 16% year over year, as the price of the company’s 20% unhedged fuel more than doubled during the quarter. Higher environmental taxes and a 6% increase in flight hours added pressure. Depreciation climbed 21% from the year-ago reported quarter, reflecting 29 additional Boeing 737-8200 aircraft, greater utilization and higher maintenance provisions. Route charges rose 8%, while maintenance, materials and repair expenses increased 30% because of fleet growth, labor inflation and greater aircraft usage. High costs naturally put pressure on margins.
RYAAY’s Price Performance
Shares of RYAAY have declined in double digits so far this year. The disappointing price performance resulted in RYAAY underperforming the Zacks Airline industry in the said time frame. Additionally, RYAAY’s price performance looks unfavorable compared to that of other airline operators like Alaska Air Group, Inc. (ALK - Free Report) and Allegiant Travel Company (ALGT - Free Report) in the same timeframe.
RYAAY Stock’s YTD Price Comparison
Unattractive Valuation Picture for RYAAY Stock
Ryanair looks expensive from a valuation standpoint. Considering the forward 12-month price-to-sales ratio (P/S-F12M), the company is trading at a premium compared to the industry.
The stock has a forward 12-month P/S-F12M of 1.50X compared with 0.52X for the industry over the past five years. These factors indicate that the stock’s valuation is unattractive.
RYAAY P/S Ratio (Forward 12 Months) Vs. Industry
Not an Opportune Time to Buy Ryanair Stock
High unhedged fuel costs are acting as a bane for Ryanair’s growth prospects. The upward movement in oil prices (all thanks to the ongoing global uncertainty) is naturally hurting the bottom line of airlines because fuel expenses represent a key input cost for airlines. With most U.S. carriers having abandoned fuel hedging strategies, such oil supply disruption has left them fully exposed to price spikes.
Production delays at Boeing have been hurting the fleet-related plans of most airline companies, and it is no different for RYAAY. Escalating operating expenses due to high fuel costs, staff costs and higher air traffic control fees are likely to hurt Ryanair’s bottom line. High costs naturally put pressure on margins. Share price volatility continues to be another concern. Collectively, the aforesaid factors diminish RYAAY’s appeal as an investment at this juncture.
The negativity surrounding the stock outweighs the positives like the upbeat traffic scenario, fleet expansion efforts, solid balance sheet and consistent efforts to reward shareholders through dividends and share buybacks. So, the stock appears to be a risky bet for investors. The stock’s current Zacks Rank #4 (Sell) justifies our analysis.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.