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Is Ryanair Stock a Buy As It Reaches New High?

Shares of Ryanair RYAAY surged to a new all-time high on Monday amid what has otherwise been a rough day across much of the market. And with no major Ryanair-related news to speak of, now is a great time to look at some of the company’s current fundamentals and latest happenings to see why investor confidence remains sky high.

Ryanair’s stock price climbed over 1% to reach a new intraday trading high of $127.59 per share—in contrast to some of the biggest tech companies, including Amazon AMZN, Apple AAPL, and Facebook FB, which caused the broader S&P 500 to sink (also read: Why Are Tech Stocks Tumbling Today?).

Today’s gains are also part of a much larger move that has seen the discount European airline power’s stock price soar over 50% in the last year, including a 19% surge over the last 12 weeks.

Recent News

Ryanair released its February traffic results in early March and showed solid customer growth.

Traffic grew 5% from the year-ago period to reach 8.6 million customers. Ryanair also reported a 95% load factor and noted that its rolling annual traffic climbed 9% to 130 million customers.

Last week, Ryanair announced that it will add Turkey to its roster of destinations as part of a larger European expansion. The country, which had experienced a decline in overall tourism, has seen a recent uptick that Ryanair hopes to capitalize on.

The discount airline company also recently rolled out a solution to its German pilot issue that led to a brief strike late last year. This move could prove vital as Ryanair continues its push in Germany.

Passenger numbers at the Frankfurt airport are in fact expected to climb by as much as 6%, based on a recent report from German airport operator Fraport. Frankfurt, which is one Europe’s busiest airports, is projected to see its passenger numbers reach a high end of 68.5 million, up from 64.5 million in 2017.

The company noted that Lufthansa and Ryanair’s expansion are expected to drive a large portion of this growth.

More Fundamentals

Ryanair is expected to see its revenues jump by more than 24% this quarter to reach $1.55 billion, based on our most recent Zacks Consensus Estimates. The company is also projected to see its earnings climb by 11.5% to touch $0.29 per share.

The airline firm’s full-year sales are expected to hit $8.31 billion, which would mark a nearly 14% climb. Looking even further down the road, Ryanair is expected to see its EPS figure expand at an annualized rate of 17.3% over the next three to five years. This extended bottom line growth projection should encourage investors as the company looks poised to boost profits while spending money to expand into new markets throughout Europe.

Bottom Line

Ryanair is currently a Zacks Rank #3 (Hold). The stock is trading at a 17x earnings, which is a slight premium compared to the rest of the “Transportation – Airline” industry. This seems to be based on investor confidence for long-term growth compared to airlines such as Alaska Air ALK, Air France-KLM AFLYY, and Southwest LUV.

The company’s stock price might also seem a little steep as it just reached an all-time high. But comparatively, at its current price, Ryanair’s Forward P/E looks cheap against where it stood as recently as May of last year.

With all of that said, now might not be a bad time to scoop up Ryanair as a continued surge could be on the horizon.

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