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Aug 22 2016, 08:31 IST/BST
Airlines
A summer of discontent? Buy the structural winner, Ryanair
- Sectors : Airlines
- Companies : Lufthansa | easyJet | Air France KLM | IAG | Wizz Air Holdings | Ryanair Holdings | Norwegian Air
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| Air France KLM | NEUTRAL | 22/08/16 | Outperform | 25/01/16 | 494c |
| easyJet | NEUTRAL | 22/01/15 | Outperform | 17/06/14 | 1105p |
| IAG | OUTPERFORM | 10/09/14 | Neutral | 15/01/14 | 445c |
| Lufthansa | NEUTRAL | 16/10/15 | Underperform | 22/01/15 | 1040c |
| Norwegian Air | NEUTRAL | 01/09/15 | Underperform | 22/01/15 | nok30280 |
| Ryanair Holdings | OUTPERFORM | 07/12/09 | Neutral | 02/11/09 | 1195c |
| Wizz Air Holdings | NEUTRAL | 21/06/16 | N/A | N/A | 1588p |
DAVY VIEW
The European airline sector has lost 20% of its value by market cap in the last two months, driven by 16% earnings downgrades. This report reviews key recent trends across the sector and the near-term outlook into the end of the year. We think Ryanair stands out as the most compelling investment case at current share price levels, screening well on structural growth, defensiveness and valuation metrics. We expect greater granularity on ancillaries to be a catalyst for the remainder of the year. We also still see good long-term value in IAG, but the stock lacks positive catalysts in the very short term.
