Stockhub

Ryanair Holdings plc: Difference between revisions

Page Discussion
(Added a DCF analysis section)
No edit summary
Line 1: Line 1:
== Summary ==
{{Infobox airline
| image_size = 250
| airline = Ryanair
| image = Ryanair.svg
| traded_as = {{unbulleted list|{{EuronextDublin|RYA|IE00BYTBXV33|XDUB}}|[[ISEQ 20]] component|{{NASDAQ|RYAAY}}}}
| IATA = FR
| ICAO = RYR
| callsign = RYANAIR
| aoc =
| hubs =
| focus_cities =
| frequent_flyer =
| alliance =
| subsidiaries = Ryanair DAC<br />[[Malta Air]]<br />[[Buzz (Ryanair)|Buzz]]<br />[[Lauda Europe]]<br>[[Ryanair UK]]
| fleet_size = 563
| destinations = [[List of Ryanair destinations|222]]
| num_employees = 19,000 (2022)<ref>{{cite web |title=Ryanair-2022-Annual-Report |url=https://investor.ryanair.com/wp-content/uploads/2022/07/Ryanair-2022-Annual-Report.pdf |publisher=Ryanair}}</ref>
| alt =
| founded = {{start date and age|1984|11|28|df=y}}<ref name=founded>{{cite book|last=Aldous|first=Richard|year=2013|title=Tony Ryan: Ireland's Aviator|url=https://books.google.com/books?id=luz4AwAAQBAJ|publisher=Gill & Macmillan Ltd|page=80|isbn=978-0-7171-5781-5}}</ref><!--<br />where?-->
| commenced = {{start date and age|1985|07|08|df=y}}
| bases = {{Collapsible list
| framestyle = border:none; padding:0;
| title      = List of bases
|[[Agadir–Al Massira Airport|Agadir]]
|[[Alicante–Elche Miguel Hernández Airport|Alicante]]
|[[Athens International Airport|Athens]]
|[[Josep Tarradellas Barcelona-El Prat Airport|Barcelona]]
|[[Bari Airport|Bari]]
|[[Beauvais–Tillé Airport|Beauvais]]
|[[Belfast International Airport|Belfast International]]
|[[Orio al Serio International Airport|Bergamo]]
|[[Berlin Brandenburg Airport|Berlin]]
|[[Billund Airport|Billund]]<ref>{{cite news|url=https://www.thelocal.dk/20210505/ryanair-relaunches-at-billund-airport-with-26-destinations/|title=Ryanair to relaunch at Billund Airport with 26 destinations|website=[[The Local]]|date=5 May 2021}}</ref>
|[[Birmingham Airport|Birmingham]]
|[[Bologna Guglielmo Marconi Airport|Bologna]]
|[[Bordeaux Mérignac Airport|Bordeaux]]
|[[Bournemouth Airport|Bournemouth]]
|[[Bratislava Airport|Bratislava]]
|[[Brindisi Airport|Brindisi]]
|[[Bristol Airport|Bristol]]
|[[Henri Coandă International Airport|Bucharest]]
|[[Budapest Ferenc Liszt International Airport|Budapest]]
|[[Cagliari-Elmas Airport|Cagliari]]
|[[Catania-Fontanarossa Airport|Catania]]
|[[Chania International Airport|Chania]]<ref name="auto">{{cite web|url=https://corporate.ryanair.com/news/ryanair-opens-three-new-bases-in-greece-for-summer-21/|title=Ryanair Opens Three New Bases In Greece For Summer '21 &#124; Ryanair's Corporate Website|website=corporate.ryanair.com|date=24 March 2021 }}</ref>
|[[Brussels South Charleroi Airport|Charleroi]]
|[[Cologne Bonn Airport|Cologne/Bonn]]
|[[Corfu International Airport|Corfu]]<ref name="auto" />
|[[Cork Airport|Cork]]
|[[Dublin Airport|Dublin]] (headquarters)
|[[East Midlands Airport|East Midlands]]
|[[Edinburgh Airport|Edinburgh]]
|[[Faro Airport|Faro]]
|[[Fes–Saïss Airport|Fes]]
|[[Gdańsk Lech Wałęsa Airport|Gdańsk]]
|[[Glasgow Prestwick Airport|Glasgow Prestwick]]
|[[Göteborg Landvetter Airport|Gothenburg]]
|[[Frankfurt–Hahn Airport|Hahn]]<ref>{{cite web |title=Ryanair Closes Frankfurt Am Main Base |url=https://corporate.ryanair.com/news/ryanair-closes-frankfurt-am-main-base/ |website=ryanair.com |date=7 January 2022 |access-date=7 January 2022}}</ref>
|[[Ibiza Airport|Ibiza]]
|[[Baden Airpark|Karlsruhe/Baden-Baden]]
|[[Katowice Airport|Katowice]]
|[[Kaunas Airport|Kaunas]]
|[[Kraków John Paul II International Airport|Kraków]]
|[[Lamezia Terme International Airport|Lamezia Terme]]
|[[Leeds Bradford Airport|Leeds/Bradford]]
|[[Lisbon Portela Airport|Lisbon]]
|[[Liverpool John Lennon Airport|Liverpool]]
|[[London Luton Airport|London Luton]]
|[[London Stansted Airport|London Stansted]] (largest base)
|[[Adolfo Suárez Madrid-Barajas Airport|Madrid]]
|[[Málaga Airport|Málaga]]
|[[Malta International Airport|Malta]]
|[[Manchester Airport|Manchester]]
|[[Marrakesh Menara Airport|Marrakesh]]
|[[Marseille Provence Airport|Marseille]]
|[[Memmingen Airport|Memmingen]]
|[[Milan Malpensa Airport|Milan Malpensa]]
|[[Naples International Airport|Naples]]
|[[Newcastle International Airport|Newcastle upon Tyne]]
| [[Nuremberg Airport|Nuremberg]]
|[[Falcone–Borsellino Airport|Palermo]]
|[[Palma de Mallorca Airport|Palma de Mallorca]]
|[[Paphos International Airport|Paphos]]
|[[Galileo Galilei Airport|Pisa]]
|[[Pescara Airport|Pescara]]
|[[João Paulo II Airport|Ponta Delgada]]
|[[Poznań–Ławica Airport|Poznań]]
|[[Václav Havel Airport Prague|Prague]]
|[[Francisco de Sá Carneiro Airport|Porto]]
|[[Rhodes International Airport|Rhodes]]<ref name="auto" />
|[[Riga International Airport|Riga]]<ref>{{cite web|url=https://www.aviation24.be/airlines/ryanair/ryanair-announces-new-base-in-riga-for-winter-21-with-two-based-aircraft-and-16-new-routes/|title=Ryanair announces new base in Riga for Winter '21 with two based aircraft and 16 new routes|date=28 April 2021}}</ref>
|[[Ciampino–G. B. Pastine International Airport|Rome–Ciampino]]
|[[Leonardo da Vinci–Fiumicino Airport|Rome–Fiumicino]]
|[[Shannon Airport|Shannon]]
|[[San Pablo Airport|Seville]]
|[[Santiago–Rosalía de Castro Airport|Santiago de Compostela]]
|[[Sofia Airport|Sofia]]
|[[Stockholm Arlanda Airport|Stockholm Arlanda]]<ref>{{cite news|url=https://www.thelocal.com/20210506/ryanair-to-start-flying-from-arlanda-this-autumn/|title=Ryanair to start flying from Arlanda this autumn|website=[[The Local]]|date=6 May 2021}}</ref>
|[[Tenerife-South Airport|Tenerife South]]
|[[Thessaloniki International Airport|Thessaloniki]]
|[[Toulouse-Blagnac Airport|Toulouse]]
|[[Treviso Airport|Treviso]]<ref>{{cite web |url=https://corporate.ryanair.com/news/ryanair-announces-new-base-at-venice-treviso-2-based-aircraft-200m-investment-and-18-new-routes/ |title=Ryanair Announces New Base At Venice Treviso |access-date=4 December 2020 |website=ryanair.com|date=4 December 2020 }}</ref>
|[[Turin Airport|Turin]]
|[[Valencia Airport|Valencia]]
|[[Vienna International Airport|Vienna]]
|[[Venice Marco Polo Airport|Venice]]<ref>{{cite web |title=New Ryanair Base At Venice Marco Polo Airport |url=https://corporate.ryanair.com/news/new-ryanair-base-at-venice-marco-polo-airport/ |website=ryanair.com |date=7 October 2021 |access-date=7 October 2021}}</ref>
|[[Vilnius Airport|Vilnius]]
|[[Warsaw Modlin Airport|Warsaw Modlin]]
|[[Copernicus Airport Wrocław|Wrocław]]
|[[Weeze Airport|Weeze]]
|[[Zadar Airport|Zadar]]<ref>{{cite web|url=https://corporate.ryanair.com/news/ryanair-opens-a-new-zadar-base-for-summer-21/|title=Ryanair Opens A New Zadar Base For Summer '21 &#124; Ryanair's Corporate Website|website=corporate.ryanair.com|date=30 March 2021 }}</ref>
|[[Zagreb Airport|Zagreb]]<ref>{{cite web|url=https://corporate.ryanair.com/news/ryanair-announces-new-base-in-zagreb/|title=Ryanair Announces New Base In Zagreb &#124; Ryanair's Corporate Website|website=corporate.ryanair.com|date=30 March 2021 }}</ref>}}
| secondary_hubs =
| lounge =
| headquarters = [[Swords, Dublin]], Ireland
| key_people = {{indented plainlist|
* [[David Bonderman]] (Chairman)
* [[Michael O'Leary (businessman)|Michael O'Leary]] {{nowrap|(Group [[CEO]])}}
* Edward Wilson {{nowrap|(Ryanair CEO)}}
}}
| revenue = {{increase}} {{€|10.775 billion|link=yes}} (2023)
| operating_income = <!-- {{increase}} {{€|x.xxx billion}} (2023) -->
| net_income = {{increase}} {{€|1.314 billion}} (2023)
| assets = {{increase}} {{€|16.406 billion}} (2023)
| equity = {{increase}} {{€|5.643 billion}} (2023)
| website = {{URL|https://www.ryanair.com|ryanair.com}}
}}


Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, Germany, and other European countries. It is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services; in-flight sale of beverages, food, duty-free, and merchandise; and marketing of car hire and accommodation services, and travel insurance through its website and mobile app. In addition, the company offers aircraft and passenger handling, ticketing, and maintenance and repair services; and markets car parking, fast-track, airport transfers, attractions, and activities on its website and mobile app, as well as sells gift vouchers. As of June 30, 2022, it had a principal fleet of approximately 483 Boeing 737 aircrafts and 29 Airbus A320 aircrafts; and offered approximately 3,000 short-haul flights per day serving approximately 225 airports. Ryanair Holdings plc was founded in 1985 and is headquartered in Swords, Ireland.
Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, Germany, and other European countries. It is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services; in-flight sale of beverages, food, duty-free, and merchandise; and marketing of car hire and accommodation services, and travel insurance through its website and mobile app. In addition, the company offers aircraft and passenger handling, ticketing, and maintenance and repair services; and markets car parking, fast-track, airport transfers, attractions, and activities on its website and mobile app, as well as sells gift vouchers. As of June 30, 2022, it had a principal fleet of approximately 483 Boeing 737 aircrafts and 29 Airbus A320 aircrafts; and offered approximately 3,000 short-haul flights per day serving approximately 225 airports. Ryanair Holdings plc was founded in 1985 and is headquartered in Swords, Ireland.


== Valuation ==


== Discounted Cash Flow Analysis ==
=== Discounted Cash Flow Analysis ===


==== Historical Cash Flows: ====
===== Historical Cash Flows: =====
Ryan Air's annual free cash flows from the past 10 years<ref><nowiki>https://www.macrotrends.net/stocks/charts/RYAAY/ryanair-holdings/free-cash-flow</nowiki></ref>:
Ryan Air's annual free cash flows from the past 10 years<ref><nowiki>https://www.macrotrends.net/stocks/charts/RYAAY/ryanair-holdings/free-cash-flow</nowiki></ref>:
{| class="wikitable"
{| class="wikitable"
Line 58: Line 185:
|}
|}


==== Projected Cash Flows: ====
===== Projected Cash Flows: =====
Projected cash flow values for the next 10 years, based on an earnings growth prediction rate of 12.3%<ref>[https://simplywall.st/stocks/ie/transportation/ise-rya/ryanair-holdings-shares/future#:~:text=Ryanair%20Holdings%20is%20forecasted%20to,be%2025.3%25%20in%203%20years. https://simplywall.st/stocks/ie/transportation/ise-rya/ryanair-holdings-shares/future#:~:text=Ryanair%20Holdings%20is%20forecasted%20to,be%2025.3%25%20in%203%20years.]</ref>:
Projected cash flow values for the next 10 years, based on an earnings growth prediction rate of 12.3%<ref>[https://simplywall.st/stocks/ie/transportation/ise-rya/ryanair-holdings-shares/future#:~:text=Ryanair%20Holdings%20is%20forecasted%20to,be%2025.3%25%20in%203%20years. https://simplywall.st/stocks/ie/transportation/ise-rya/ryanair-holdings-shares/future#:~:text=Ryanair%20Holdings%20is%20forecasted%20to,be%2025.3%25%20in%203%20years.]</ref>:
{| class="wikitable"
{| class="wikitable"
Line 95: Line 222:
|}
|}


==== Determining a Discount Rate: ====
===== Determining a Discount Rate: =====
A WACC value was calculated as follows:
A WACC value was calculated as follows:


Line 103: Line 230:


''Assumed market return premium = 6% (government data)''  
''Assumed market return premium = 6% (government data)''  




Line 111: Line 239:
WACC = 13.13%
WACC = 13.13%


==== Present value of predicted future cash flows: ====
===== Present value of predicted future cash flows: =====
The present value of each predicted cash flow (over the next 10 years), after the discount rate had been applied as follows:
The present value of each predicted cash flow (over the next 10 years), after the discount rate had been applied as follows:


Line 150: Line 278:
|}
|}


==== Net present / intrinsic value of Ryan Air: ====
===== Net present / intrinsic value of Ryan Air: =====
The net present value was calculated by summing the present values of predicted cash flows over the next 10 years:
The net present value was calculated by summing the present values of predicted cash flows over the next 10 years:


Net present value = £19 817.71 Mn (£19.82 Bn)
Net present value = £19 817.71 Mn (£19.82 Bn)


==== Comparison with present market cap of Ryan Air: ====
===== Comparison with present market cap of Ryan Air: =====
Given that the net present value (£19.82 Bn) calculated from the DCF analysis is less than the current market cap of Ryan Air (£18.98 Bn - as of October 2023<ref>[https://companiesmarketcap.com/ryanair/marketcap/#:~:text=Market%20cap%3A%20%2422.31%20Billion,cap%20according%20to%20our%20data. https://companiesmarketcap.com/ryanair/marketcap/#:~:text=Market%20cap%3A%20%2422.31%20Billion,cap%20according%20to%20our%20data.]</ref>) - it is possible that Ryan Air is ''potentially undervalued'', calling for a sensitivity analysis to be carried out.
Given that the net present value (£19.82 Bn) calculated from the DCF analysis is less than the current market cap of Ryan Air (£18.98 Bn - as of October 2023<ref>[https://companiesmarketcap.com/ryanair/marketcap/#:~:text=Market%20cap%3A%20%2422.31%20Billion,cap%20according%20to%20our%20data. https://companiesmarketcap.com/ryanair/marketcap/#:~:text=Market%20cap%3A%20%2422.31%20Billion,cap%20according%20to%20our%20data.]</ref>) - it is possible that Ryan Air is ''potentially undervalued'', calling for a sensitivity analysis to be carried out.


== References and notes ==
__INDEX__
__INDEX__

Revision as of 12:57, 11 October 2023

Ryanair
Ryanair.svg
IATA ICAO Callsign
FR RYR RYANAIR
Founded28 November 1984; 39 years ago (1984-11-28)[1]
Commenced operations8 July 1985; 38 years ago (1985-07-08)
Operating bases
List of bases
SubsidiariesRyanair DAC
Malta Air
Buzz
Lauda Europe
Ryanair UK
Fleet size563
Destinations222
Traded as
HeadquartersSwords, Dublin, Ireland
Key people
RevenueIncrease €10.775 billion (2023)
Net incomeIncrease €1.314 billion (2023)
Total assetsIncrease €16.406 billion (2023)
Total equityIncrease €5.643 billion (2023)
Employees19,000 (2022)[11]
Website

Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, Germany, and other European countries. It is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services; in-flight sale of beverages, food, duty-free, and merchandise; and marketing of car hire and accommodation services, and travel insurance through its website and mobile app. In addition, the company offers aircraft and passenger handling, ticketing, and maintenance and repair services; and markets car parking, fast-track, airport transfers, attractions, and activities on its website and mobile app, as well as sells gift vouchers. As of June 30, 2022, it had a principal fleet of approximately 483 Boeing 737 aircrafts and 29 Airbus A320 aircrafts; and offered approximately 3,000 short-haul flights per day serving approximately 225 airports. Ryanair Holdings plc was founded in 1985 and is headquartered in Swords, Ireland.

Valuation

Discounted Cash Flow Analysis

Historical Cash Flows:

Ryan Air's annual free cash flows from the past 10 years[12]:

Year Annual Free Cashflow (£ Mn)
2023 2 063.22
2022 1 010.68
2021 (-3 072.54)
2020 831.96
2019 545.19
2018 892.85
2017 523.90
2016 1 133.79
2015 1 143.06
2014 722.26
2013 918.44
2012 1 006.38
2011 (- 146.75)
2010 52.45
2009 36.00
Projected Cash Flows:

Projected cash flow values for the next 10 years, based on an earnings growth prediction rate of 12.3%[13]:

Year Projected cash flow (£Mn)
2024 2 317.00
2025 2 601.99
2026 2 922.03
2027 3 281.44
2028 3 685.06
2029 4 138.32
2030 4 647.33
2031 5 218.96
2032 5 860.89
2033 6 581.78
Determining a Discount Rate:

A WACC value was calculated as follows:

UK 10 Year Government Bond Yield = 4.43% (government data)

Beta value = 1.45[14]

Assumed market return premium = 6% (government data)


WACC = [risk-free rate] + [beta value * assumed market return premium]

WACC = [4.43%] + [1.45 * 6%]

WACC = 13.13%

Present value of predicted future cash flows:

The present value of each predicted cash flow (over the next 10 years), after the discount rate had been applied as follows:

Present value of cash flow = { predicted cash flow }  /  { (1 + WACC)^(number of years) }

Year Present value of predicted cash flow (£Mn)
2024 2 048.08
2025 2 033.06
2026 2 018.14
2027 2 003.33
2028 1 988.64
2029 1 974.05
2030 1 959.56
2031 1 945.19
2032 1 930.92
2033 1 916.75
Net present / intrinsic value of Ryan Air:

The net present value was calculated by summing the present values of predicted cash flows over the next 10 years:

Net present value = £19 817.71 Mn (£19.82 Bn)

Comparison with present market cap of Ryan Air:

Given that the net present value (£19.82 Bn) calculated from the DCF analysis is less than the current market cap of Ryan Air (£18.98 Bn - as of October 2023[15]) - it is possible that Ryan Air is potentially undervalued, calling for a sensitivity analysis to be carried out.

References and notes

  1. ↑ Aldous, Richard (2013). Tony Ryan: Ireland's Aviator. Gill & Macmillan Ltd. p. 80. ISBN 978-0-7171-5781-5.
  2. ↑ "Ryanair to relaunch at Billund Airport with 26 destinations". The Local. 5 May 2021.
  3. ↑ 3.0 3.1 3.2
  4. ↑
  5. ↑
  6. ↑ "Ryanair to start flying from Arlanda this autumn". The Local. 6 May 2021.
  7. ↑
  8. ↑
  9. ↑
  10. ↑
  11. ↑
  12. ↑ https://www.macrotrends.net/stocks/charts/RYAAY/ryanair-holdings/free-cash-flow
  13. ↑ https://simplywall.st/stocks/ie/transportation/ise-rya/ryanair-holdings-shares/future#:~:text=Ryanair%20Holdings%20is%20forecasted%20to,be%2025.3%25%20in%203%20years.
  14. ↑ https://finance.yahoo.com/quote/RYAAY/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAA-QsnB5Z3NE6_hbXttVYrUnEYFEWtxrdExBHRP0wG2Rwy_Q5T0mlSLNPF2WwFhQbDYfevMryfNXYe8P_oYpm8Xt7ytyiQCF8KpRHed-kXXUK8BorxHOIxb-yyG92X5Dx2IfOOw3sPZlEWgKeH5FetsTHRtMu9XR-g5kdP4aoX-1
  15. ↑ https://companiesmarketcap.com/ryanair/marketcap/#:~:text=Market%20cap%3A%20%2422.31%20Billion,cap%20according%20to%20our%20data.
Retrieved from ‘https://stockhub.co/index.php?title=Ryanair_Holdings_plc&oldid=10487712’