Ryanair Holdings plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Shareholders might have noticed that Ryanair Holdings plc (ISE:RYA) filed its first-quarter result this time last week. The early response was not positive, with shares down 8.7% to €24.58 in the past week. Statutory earnings per share fell badly short of expectations, coming in at €0.51, some 23% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €4.4b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Ryanair Holdings' 18 analysts is for revenues of €15.9b in 2027. This would reflect a satisfactory 2.2% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to decrease 3.6% to €1.75 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €16.2b and earnings per share (EPS) of €1.93 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
See our latest analysis for Ryanair Holdings
The consensus price target held steady at €29.92, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Ryanair Holdings analyst has a price target of €34.00 per share, while the most pessimistic values it at €27.00. This is a very narrow spread of estimates, implying either that Ryanair Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Ryanair Holdings' revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2027 being well below the historical 24% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Ryanair Holdings.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ryanair Holdings. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Ryanair Holdings going out to 2029, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Ryanair Holdings (of which 1 is a bit concerning!) you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.