Ryanair shares up almost 6% in pre-market as the carrier beats earnings

Ryanair (NASDAQ: RYAAY) reported earnings on July 25, seeing revenue growth but also tampering expectations of the markets. On the positive side, the company returned to profit, with income increasing by 602% compared to last year’s period. Similarly, the low-cost carrier has seen a surge in traffic of 45.5 million customers compared to 8.1 million in June 2021. 

The Irish airline carved a €170 million (~$174 million) profit, up from a prior loss of €273 million (~$279) in 2021. While earnings remain below pre-pandemic levels, the sharp rebound bolstered optimism, with CEO Michael O’Leary voicing confidence that 100% of scheduled flights will operate in the coming months while the company continues to increase its market share. 

“Over the past 2-years, numerous airlines went bankrupt and many legacy carriers (incl. Alitalia, TAP, SAS and LOT) only survived by significantly reducing their fleets and passenger capacity, while receiving multi-billion-euro State Aid packages,” O’Leary clarified. “These structural capacity reductions have created enormous growth opportunities for Ryanair to deploy our new, fuel efficient, B737 Gamechangers and our market share has increased significantly across major markets in Europe.”

Meanwhile, the U.S. listed shares of the airliner are up 5.64% in pre-market trading. 

RYAAY chart and analysis  

In the last month, RYAAY has been trading in the $65.07 to $75.52 range, while the stock is down over 33% year-to-date (YTD). The support zone is located at $72.33, after the pre-market move. On the other hand, resistance is at $84.07 in the daily time frame, depending on the activity the shares see once the market opens.  

TipRanks analysts rate the shares as a ‘strong buy’, with all three market experts predicting that in the next 12 months the shares could reach $121, 70.49% higher than the current trading price of $70.97. 

Despite posting a profitable quarter, the company management tapered the markets’ expectations, citing possible new Covid flareups, supply chain risks, volatile oil prices, and geopolitical risks as factors influencing the company’s performance. 

Moreover, the airliner’s recovery could encourage investors to move on the shares since YTD they’re down big, with a potential to run up if the travel recovery continues.  

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