DAVY VIEW

The ultra-low-cost carriers (ULCCs) will report Q2 (peak summer) results in November. Ryanair will report Q2 profits near all-time highs as current year hedges largely protect margin; however, as hedges roll off in FY28 and fuel prices remain elevated, we have adjusted our FY28 estimates by -20%. We move our price target (PT) to €27.5. Ryanair remains perfectly positioned for profitable growth over the medium term. Meanwhile, Wizz Air’s capacity growth of c.30% in an elevated fuel environment will result in a third consecutive year of Q2 profit declines. For the rest of FY27, it is in reset mode as it attempts to focus growth on its core CEE (Central, Eastern Europe) market. We maintain our PT of £14.