Merrion drops 'buy' rating on Ryanair
Published 08/10/2016 | 02:30
Merrion Stockbrokers has downgraded Ryanair from 'buy' to 'hold' amid growing pressures in the European aviation sector.
Analyst Darren McKinley said a profit downgrade coming out of EasyJet and a weakened sterling has caused the company to diminish its rating for the airline.
However, Mr McKinley said Ryanair is still viewed as a high-quality company with a long-term upside.
"Recent sterling weakness is negative for Ryanair, even though they have a partial natural hedge in place.
"Crude oil's recent rally will likely weigh on sentiment for the sector even though we see substantial benefits to Ryanair and EasyJet in the year ahead," he said in a note.
Shares in Ryanair are down more than 20pc in the year so far and slipped further yesterday.
Ryanair shares were trading in Dublin yesterday at €11.49 at 2.15pm, down 2pc.
The dip follows an announcement from Ryanair rival EasyJet on Thursday.
The British low-cost airline announced to shareholders that it would take a £90m (€99.7m) hit from currencies in its current financial year.
With jet fuel priced in dollars it has become more expensive for airlines in Europe to run their aircraft.