
Ryanair share price continued its strong bull run this year, reaching its highest level on record and bringing its market capitalization to over $38 billion, making it one of the biggest airline groups globally.
It jumped by 60% this year and 202% from its lowest level during the pandemic. In contrast, the US Global Jets ETF (JETS), which tracks the biggest companies in the industry, rose by 14% this year.
Ryanair, a top company in the low-cost flying industry, has done well in the past few months as its business has boomed and its costs have moderated. It did much better than other similar companies like EasyJet and Southwest.
The most recent results showed that the company carried 61.2 million passengers in the second quarter of the year, up by 2% from 59.8 million. It carried 119 million passengers in the year’s first half, from 115.3 million in the same period last year.
Ryanair’s load factor continued rising, while the average fare rose to €65 in the last quarter from €61 million in the second quarter of last year.
As a result, the company’s revenue rose to €5.48 billion from €5.07 billion in the same quarter last year. Also, the revenue in the first half rose by 13% to €9.82 billion.
Ryanair’s revenue growth happened as its costs rose by a smaller pace, with the unit cost rising by just 1%. It also added 91 routes, even as its challenges with Boeing deliveries accelerated.
Most importantly, the company announced a huge share buyback and maintained a solid credit rating. Its balance sheet has a solid BBB+ credit rating and gross cash of €3 billion, which helped it to launch a €750 million share buyback. In a note, a top analyst at Davy noted:
“It’s got a singular focus and execution of its business model with a long-established management team, and driven by having the lowest cost base, and possibly the strongest balance sheet as well.”
Ryanair has also boosted its guidance as Boeing has improved its deliveries, a trend that may continue in the coming year. Indeed, it has lifted its passenger guidance for the year through the year ending in March.
There are other reasons why the Ryanair share price has soared this year. For example, it allowed non-EU nationals to own shares, with investors who own its American ADRs being incentivized to buy its ordinary shows.
The daily timeframe chart shows that the RYA share price has been in a strong bull run in the past few years, moving to a record high of €30.17. It moved above the important resistance level at €26.97, its highest point in August.
The stock has jumped above the 50-day and 100-day Exponential Moving Averages (EMA). Its Supertrend indicator has been green in the past few months.
The Relative Strength Index (RSI) and the Stochastic Oscillators have continued rising. Therefore, the stock will likely continue rising in the coming months, potentially to the psychological point at €35.
The alternative scenario is where the stock drops to the support at €26.8 and then resumes the uptrend.
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