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JP Morgan says Ryanair is undervalued compared to peers as it lifts price target

Ryanair shares have surged in 2017 but not by as much as the likes of easyJet and IAG

ryanair planes lined up at an airport
The low-cost carrier should also benefit from better traffic, lower costs and higher-than-expected fares

Analysts at JP Morgan have lifted their price target for Ryanair PLC (LON:RYA) as they now think the budget airline is undervalued compared to its peers.

In a note to clients this morning, Christopher Combe wrote that Ryanair appeared “relatively more attractive” following stronger rallies from the likes of International Consolidated Airlines Group PLC (LON:IAG) and easyjet PLC (LON:EZJ) so far this year.

Ryanair itself has enjoyed a strong 2017 in terms of share price momentum, but its 28% gain still lags behind the sector average of 60%.

As well as looking cheap compared to its fellow airliners, Combe also upgraded Ryanair's first quarter net income by 20% to €372mln – a 46% year-on-year rise.

He expects growth to be driven by increased passenger numbers and better-than-expected fare prices, while he adds that Ryanair should benefit from falling fuel costs too.

The analyst still has the stock as ‘overweight’, but upped his price target by 5% to €21.50 (from €20.50).

Towards the end of the morning session, Ryanair shares were off 0.1% at €18.70.

Quick facts: Ryanair Holdings plc

Price: 10.27 EUR

LSE:RYA
Market: LSE
Market Cap: €11.18 billion
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