DAVY VIEW

We are raising our 12-month target price for Ryanair to €16. However, in this report, we outline three catalysts which could justify a share price of €25, almost double the current level. A step-up in ancillary revenues, the game-changing economics of MAX deliveries and potentially more than €5.5bn in cash returns to shareholders over five years underpin a compelling medium-term investment case. The next catalyst is likely to be the lifting of the ancillary revenue target in November, followed by a distribution of more than €1bn in February 2017. On a risk-reward basis, Ryanair is our top pick in the sector.