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Nov 4 2019, 06:45 GMT
Ryanair has delivered a Q2 beat of >8% over consensus, driven by better unit revenues (fares and ancillaries) and ex-fuel cost declines of 1%. Further, the investment in handling, which has driven on-time performance >90% (excluding ATC), has reduced costs and resulted in guest satisfaction at record levels. FY 2020 guidance has been narrowed to €800-900m (previously €750-950m) and, with fuel declining on an absolute basis by c.€120m next year, at current prices we believe we have now past the tipping point for margin expansion. We are likely to raise our net income forecasts for FY 2020 and FY 2021 by c.2% to c.€860m and c.€1,100m respectively and up our price target to €14 (from €12) as we believe some multiple expansion is likely.