Bank of America adjusted downwards its valuation for Ryanair Holdings following a reassessment of fuel costs, although the bank left its Buy rating unchanged and emphasized the airline’s strong hedging position among European carriers.
Analysts led by Muneeba Kayani lowered Ryanair’s euro price target to c31.10 from c33.10. The American Depositary Receipt target was reduced to $72.70 from $77.80. The firm also trimmed its fiscal year 2027 net income forecast by 5% to bring that projection into line with consensus estimates.
The revision stems from a higher jet fuel cost assumption. BofA now expects fares to rise by approximately 4% in FY27 as part of its modeling adjustments.
Jet fuel spot prices have more than doubled so far this year amid a sharp rise in Brent crude and widening spreads. Using the forward curve as of April 8, Bank of America assumed an average jet fuel price of $1,100 per metric ton in 2026, a figure that represents a 52% increase relative to the 2025 average.
In BofA’s view, fuel will account for roughly 28% of revenue for European carriers in 2026. The bank noted hedging coverage across the sector ranges from 55% to 80%, with Ryanair at the upper end of that scale.
Despite the estimate reduction, BofA highlighted potential upside for Ryanair. The bank cited continued market share gains, a robust balance sheet, and a projected 17% EPS compound annual growth rate between FY25 and FY29 as reasons for upside potential.
Ryanair shares have fallen about 11.5% year to date and currently trade at 11.6 times FY27 estimated earnings, broadly in line with the roughly 12 times ten-year average cited by BofA.
Looking ahead to company reporting, BofA said its estimates for the upcoming FY26 results, due on May 18, are largely consistent with Ryanair’s guidance. On operational metrics, fourth-quarter traffic reached 41.8 million passengers, outpacing consensus and bringing the full-year total to 208 million passengers, which matches the airline’s stated targets.
Analysts calculated that fourth-quarter fares increased 3% year on year, lifting the full-year fare increase to 9%. Those figures align with management guidance calling for an 8% to 9% full-year fare rise. Bank of America also expects Ryanair to stick with its FY27 traffic guidance of 216 million passengers.
This analysis reflects Bank of America’s updated fuel and earnings assumptions and their effects on Ryanair’s valuation and near-term outlook. The banks decision to keep a positive stance despite trimming targets underscores the tension between rising input costs and Ryanairs operational and financial strengths.