Ryanair stock loses 10% despite a strong Q1: here’s why

Ryanair Holdings plc (NASDAQ: RYAAY) lost nearly 10% on Monday even though it reported a strong fiscal first quarter.

Why is Ryanair stock down today?

Investors are concerned because the management lowered its traffic guidance for the full year. On CNBC’s “Squawk Box”, Neil Sorahan – the Chief Financial Officer of Ryanair said today:

The ultra-low-cost carrier now expects to fly 183.5 million passengers in fiscal 2024. Its previous guidance was for 185 million, as per the press release.

Year-to-date, Ryanair stock is still up more than 30%.

Ryanair Q1 financial highlights

• Net profit more than tripled to €662.9 million ($737.5 million)
• Revenue also went up materially from €2.60 billion to €3.65 billion
• Consensus was €506.2 million profit on €3.59 billion in revenue
• Traffic increased nearly 11% year-over-year to 50.4 million in Q2

Ryanair noted 23% higher operating costs in its recently concluded quarter. According to the Finance Chief, part of the weaker outlook is related also to a delay in Boeing deliveries.

Ryanair may have to cut fares

Ryanair is currently booked roughly 10% for the third quarter and under 5.0% for the final quarter of the year, as per CFO Sorahan.

Fare increases, he revealed, will be lower (sequentially) in the current quarter. Plus, Ryanair has a strong enough balance sheet to even cut fares to boost demand, if need be, the Chief Financial Officer concluded.

Wall Street currently has a consensus “buy” rating on the airline stock.