Why Ryanair (RYAAY) Stock Just Got Upgraded While U.S. Airlines Face Brutal Downgrades

Key Takeaways

• Evercore ISI boosted Ryanair to “outperform” status, increasing the price objective from $75 to $80
• Among all airlines tracked by Evercore, Ryanair stands alone with positive EPS adjustments for fiscal 2026 and 2027
• Jet fuel crack spreads have climbed to 44% of barrel pricing — dramatically exceeding the 20-25% historical norm
• Major U.S. carriers including United, Delta, and American Airlines experienced significant EPS forecast reductions
• Discounted cash flow modeling values Ryanair at €30.34 per share compared to its recent €26.61 close, indicating a 12.3% undervaluation

Evercore ISI elevated its stance on Ryanair Holdings this past Thursday, shifting the rating from “In Line” to “outperform” while simultaneously boosting its price objective from $75 to $80.

Ryanair Holdings plc, RYAAY

Analysts highlighted the carrier’s robust €1 billion net cash reserve and a 15% decline from peak January valuations as primary catalysts for the rating enhancement.

This positive reassessment emerged while Evercore simultaneously downgraded projections for the majority of airlines under its watch. Jet fuel crack spread margins have skyrocketed to 44% of Gulf Coast barrel pricing — representing more than twice the historical 20-25% benchmark.

Senior analyst Duane Pfennigwerth characterized this phenomenon as a 2.8-sigma statistical anomaly, drawing parallels to market conditions witnessed during the 2008 financial crisis and the initial phases of the Ukraine conflict.

Spot market jet fuel prices were trading approximately 53% above first-quarter averages as of mid-March. With Evercore calculating roughly a two-week delay in fuel cost impacts, the firm projects Q1 2026 Gulf Coast jet fuel will reach $2.40 per gallon.

Ryanair’s earnings per share projection for 2026 increased from $4.65 to $4.77, while the 2027 forecast climbed from $5.65 to $5.75. No other airline in the coverage universe received upward adjustments.

Competitors Face Harsh Reality

The divergence between Ryanair and its competitors couldn’t be more pronounced. United Airlines witnessed its 2026 EPS forecast plummet from $13 to $8.60. Delta’s projection fell from $7 to $5.70, while American Airlines tumbled from $2 to a negative $0.36.

Ryanair’s net debt-to-EBITDAR ratio for 2026 registers at -0.4x, representing the healthiest balance sheet position among all carriers Evercore monitors. By comparison, JetBlue registers 13.7x and American posts 7.2x.

Evercore’s projections generally trail consensus estimates for most airlines. The firm’s $8.60 United forecast sits well below Wall Street’s $12.91 consensus. Delta’s $5.70 estimate undercuts the $6.99 consensus. For Ryanair specifically, Evercore’s full-year 2026 projection of $5.52 closely aligns with the Street consensus of $5.55.

Neverthstanding these challenges, passenger demand metrics across the industry remain robust. Evercore’s proprietary Airlines Survey climbed 6.2 points to reach 70.0 in early March, with international travel components surging from 62.5 to 75.

Passenger volume data for the week concluding March 10 showed year-over-year growth of 2% and stood 5% above 2019 benchmark levels.

Valuation Analysis Reveals Opportunity

A discounted cash flow examination conducted by Simply Wall St establishes Ryanair’s fair value at €30.34 per share. With recent trading at €26.61, this suggests the stock currently trades at a 12.3% discount to its calculated intrinsic worth.

Ryanair’s current price-to-earnings multiple stands at 12.47x. This valuation exceeds the Airlines sector average of 8.66x while remaining below the peer group median of 17.24x.

Year-to-date performance shows the stock declining 10.4%, with a 5.6% pullback over the trailing 30-day period. However, longer-term returns remain impressive: up 31.1% over twelve months and posting 96.1% gains across the three-year timeframe.

Evercore’s full-year 2026 EPS estimate of $5.52 for Ryanair closely matches the $5.55 Street consensus — representing one of the few instances of analyst alignment within a coverage universe otherwise experiencing widespread downward revisions.

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