Equity valuation

: Ryanair Holdings PLC

Abstract

The main goal of this dissertation is to arrive at a fair value of Ryanair’s equity. Ryanair Holdings Plc is a low cost carrier and one of the strongest in the airline industry in Europe: transporting more than 130 million passengers per year, with thousands of flights per day and offering the cheapest fares, on average.
To reach into a final estimated price for the company’s stock value, this dissertation used three methods: the Discounted Cash Flow (DCF) methodology, the Economic Value Added (EVA) and the Multiples/Relative methodology. We will, then, compare the estimated price for each method with the current market price (16,00€) and give relative weights to each in order to land to the final target price: 17,25€. Hence, we give recommendations to investors to “Hold” their positions.
Moreover, a sensitivity analysis was performed in order to study the impact on projected forecasts on both DCF and EVA, resulting from shifts on some key variables and assumptions.
Ultimately, a comparison between this dissertation’s conclusions and the ones reached by Credit Suisse Research team was studied. Analogous to our recommendations, the bank endorsed for a “Neutral” conclusion, leading investors to “Hold” their positions. The investment bank target price for 12 months, starting at 22 Jan 2018, was 17,91€.

Date of Award	10 Jul 2018
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)