Shares regain 25c in heavy trading

Ryanair was once again the dominant stock on the Dublin market yesterday, with some 12 million of the airline's shares changing hands before the end of an otherwise quiet session.

The trend was generally positive, with shares shooting up as high as €5.15 after the European Commission's Charleroi ruling was released, before closing at €4.95, up 29 cents on the day.

Ryanair shares have now regained 25 cents of the €1.25 drop recorded last Wednesday on the back of the company's first ever profit warning.

Consensus opinion among analysts yesterday afternoon was that the Charleroi decision would have little impact on valuations going forward, with yields - the main driver behind last week's 28 per cent drop - likely to be much more important than fines for Ryanair's share price.

The problem here is one of lack of visibility, with uncertainty on the airline's yield outlook likely to hang over its shares until the situation stabilises.

Against such a backdrop, is now a good time to buy? Possibly, provided you have the appetite for a bit of a rollercoaster ride between now and then.

"The difficulty is we have no idea of timing," said Mr John Mattimoe of Merrion Stockbrokers, acknowledging that it was nigh-impossible to place a price target on a stock surrounded by such a large unknown.

Mr Mattimoe has a "hold" recommendation on Ryanair for the moment and he believes a re-rating is unlikely until the group can begin to use its competitive position for long-term growth rather than price wars and short-term expansion.

Mr Joe Gill of Goodbody Stockbrokers meanwhile pointed to history yesterday, noting that while US airline Southwest, the creator of the low-cost model, had fallen by 56 per cent in the early 1990s, it later recovered by 60 per cent within six months.

Mr Gill is expecting Ryanair's position in the growth cycle to be beneficial over the next year, with the maturing of new routes, the consolidation of new bases and the timing of Easter in the new financial year all likely to act as positive drivers.