Ryanair now among corporate ‘finest’ in Europe – Barclays
Ryanair deserves to be ranked as "one of the very finest businesses in European industrials", according to Barclays following the airline's strong performance in the first half of its financial year.
"We believe Ryanair's strategic transformation has only just begun," according to analyst Oliver Sleath.
He made his comments in a note to investors after Ryanair this week reported a pre-exceptional profit of €1.08bn - a 37pc increase on the first half of its last financial year.
It also said that it now expects its pre-exceptional full-year net profit to be at the upper end of the €1.17bn to €1.22bn range it previously forecast.
Mr Sleath said the potential earnings momentum from lower fuel costs next year remains "heavily under appreciated".
"As it sets new benchmarks for financial performance, Ryanair remains our favourite low-cost carrier," he said.
Mr Sleath pointed out that while rival carriers have flagged a slowdown in trading after a strong summer, Ryanair has continued to outperform.
He said that during a conference call with management this week, Ryanair executives, including Michael O'Leary, indicated that any reference to softer pricing was designed to rein in analyst expectations, "attract customers and scare competitors".
Mr Sleath sees the potential for Ryanair to generate about €1.3bn in net profits in the current financial year, which is 6pc above consensus estimates.
"We believe that Ryanair's total revenue per seat growth (combining average fare, load factor and ancillaries) will be positive, despite growing capacity by 18pc," he added.
Ryanair has also locked in 95pc of its fuel costs for the 2017 financial year.