Blackrock sells Ryanair stock as share target increased to €5
Published 20/01/2012 | 05:00
The UK arm of US investment group Blackrock has offloaded nearly 15 million shares in Ryanair, while Davy Stockbrokers has upped its price target for the stock to €5.
A new filing to the stock exchange shows that Blackrock Investment Management (UK) has reduced its holding of Ryanair stock by 17pc to just over 72.2 million shares. That represents a 4.89pc chunk of Ryanair's outstanding stock that is valued at about €288m.
The Blackrock unit previously reported that it held just over 87 million Ryanair shares.
The move by the global investment giant comes as Dublin stockbroker Davy yesterday said Ryanair and Easyjet remained its "top picks" in the aviation sector.
A report prepared by analysts Stephen Furlong and Joshua Goldman noted that intra-European air passenger capacity in 2011 was 2pc below the 2008 peak. That decline came as network airlines significantly reduced capacity due to the economic downturn and "intense competition" from low-cost carriers, they said.
The Association of European Airlines said yesterday that Europe's network airlines carried 363 million passengers last year, a 7.1pc increase on 2010. However, it said it didn't expect the buoyancy to last. It said fuel costs remained "cripplingly high".
Airlines such as Air-France and IAG, which includes British Airways and Iberia, faced many uncontrollable cost increases, including fuel, travel and carbon taxes, said Davy.
"The LLCs (low-cost carriers) have demonstrated an ability to pay for higher fuel costs in weaker economic conditions," the analysts added.
They described Ryanair as a "cash machine", stressing that without any new aircraft deal and little or no debt, the airline could return a "significant portion" of its cash to shareholders. Last year, they received a total €500m special dividend.
Davy raised its share price target for Ryanair from €4.50 to €5. It was trading at just under €4 yesterday. Davy cut its rating on Aer Lingus shares to 'neutral' with a price target of 75 cent.
"We do not see the Aer Lingus shares outperforming without a resolution to the pension issue and are sceptical of it gaining a trade buyer in 2012," the broker noted.