Will the Ryanair Holdings plc share price rise after today’s update?

Does Ryanair Holdings plc (LON:RYA) (RYA.L) offer long-term investment potential?


Ryanair Holdings plc (LON:RYA) (RYA.L) has released passenger statistics for December today. The company’s total passenger numbers increased by 12% to 10.3 million when compared to the same month of the previous year.

Of the 10.3 million passengers in December, 10 million flew with Ryanair, while 0.3 million flew with Laudamotion. On a 12-month rolling annual basis, passenger numbers increased from 128.9 million last year to 139.2 million in 2018, which is a rise of 8%.

Ryanair’s load factor in December was 95%, with it being 96% on a rolling 12-month basis. This is relatively high in my view, and suggests that the company’s overall strategy is making progress.

Of course, the near-term outlook for the airline industry is relatively uncertain at the moment. Brexit has the potential to cause a degree of disruption in my view, with logistics being an area of concern for some investors as the UK prepares to leave the EU.

Alongside this, the industry may experience a period of instability as a result of weak consumer confidence in the UK. Consumers seem to be uncertain ahead of Brexit and may become increasingly price conscious – even though inflation is behind wage growth. This, though, could help to make budget airlines increasingly appealing, with customers potentially favouring price over other factors such as convenience and perceived quality.

Further, the recent fall in the oil price may ease cost pressures across the industry. It may also help to support investor sentiment after what has been an uncertain period for the sector.

Therefore, with Ryanair having a P/E ratio of around 9, I think it could offer good value for money for the long term. Its share price may prove to be volatile in future months, but it could offer turnaround potential in my opinion after what has been a difficult period for its share price.

About Robert Stephens 5430 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email info@investomania.co.uk or use one of the other contact methods available on the 'Contact Us' page