Citi adds Ryanair to ‘Europe Focus List’

Citi added Ryanair to its ‘Europe Focus List’ on Friday and opened a 90-day ‘positive short-term view’.

The bank said it has seen increased client interactions following the first-quarter results.

"The key debates have been 1. Pricing Weakness: Is it company-specific or industry wide? Why is Ryanair pricing underperforming other LCC (low-cost carrier) peers? 2. Cash Return: Can the company announce additional cash returns (i.e. top-up the ongoing share buyback) at the AGM in September? 3. Valuation: What has been the fleet value and what has been the historical trend around EV/IC?"

Citi said it was interesting that it has not seen much debate around unit cost performance.

"Overall, we believe the recent move in the share price is likely overdone given the attractive valuation and market share strength," it said.

Earlier on Friday, Ryanair reported an 8% jump in passenger numbers for July.

Traffic rose to 20.2m from 18.7 in the same month a year earlier, while the load factor - which gauges how full the planes are - was stable at 96%.

On a rolling 12-month basis, passenger numbers grew 9% to 190.4m and the load factor steady at 94%.

Ryanair operated over 110,500 flights in July. It said 651 flights cancelled due to air traffic control delays.