10 Best Airline Stocks to Buy According to Hedge Funds

8. Ryanair Holdings plc (NASDAQ:RYAAY)

Number of Hedge Fund Holders: 20

Ryanair Holdings plc (NASDAQ:RYAAY) is the parent company of Irish low-cost carrier, Ryanair. As of 2023, it is the largest airline group in Europe in terms of number of passengers. The group’s subsidiaries also include Buzz Airlines, Lauda Europe, and Ryanair UK.

The company announced its first-quarter FY 2025 results in July. During the quarter, it generated a profit of EUR 360 million (approx. $390 million), which was down 46% year-over-year. EPS for the quarter stood at $1.69, well below analysts’ forecasts of $2.89 per share. This was despite a 10% traffic growth during the quarter. Ryanair attributed these weaker results to lower-than-expected airfares and the first half of Easter falling into the prior year’s Q4.

The low-cost airline earns significant profits from close-in bookings. However, each time during the last few weeks in Q1 FY25, when it removed low-fare tickets for last-minute bookings, the higher-priced tickets did not sell, according to Reuters. CEO Michael O’Leary has stated that the airline is increasingly seeing price resistance from customers and it plans on aggressively advertising low fares ahead. CFO Neil Sorahan believes the consumers have become more ‘frugal’ and ‘cautious’ after two years of considerable rise in airfares.

Despite the headwinds, Wall Street analysts are bullish on the stock and have a consensus on its Buy rating. They anticipate a 38% rise on average in its share price. This is likely due to the airline seeing record summer scheduled bookings – albeit at lower prices – with over 200 new routes and five new bases. During the Q2 earnings call, O’Leary said the airline was operating its ‘largest ever schedule’ this summer.

Another factor contributing to the company’s strength is its strong balance sheet. It ended the quarter with EUR 4.5 billion in gross cash, with net cash improving from EUR 1.4 billion to EUR 1.7 billion, reflecting the airline’s solid foundations. It continues to be one of the best airline stocks to buy according to hedge funds.