Ryanair sceptic hailed by media
With the airline still licking a fairly large wound after close to €1.5bn was wiped off its share price, Lobbenberg has emerged as the one analyst who never fully accepted its success.
For Lobbenberg, it was a case of the emperor falling off his throne and not before time.
The shares have rallied somewhat, but are a long way off the €6.90 a huge tranche of the shares sold for a few weeks ago.
They closed in Dublin yesterday at €4.93, up 8c on the day, still leaving those who bought in at the €6.90
offer very seriously annoyed. Some time ago, Lobbenberg argued the shares were probably overvalued to the tune of 25%, slightly less than the 30% they fell at on Wednesday after issuing its first profit warning.
Lobbenberg said he has consistently questioned its extraordinary success.
In May 2003, he issued a warning on the stock entitled: The Emperor is stark naked. Then the shares were trading at around €7.50.
He wrote: “Ryanair is an excellent company but cost pressures are growing. Its margins, the highest in the history of airlines, are not sustainable.
"It is not at all fair to liken Ryanair to a dotcom but it nonetheless trades in a valuation bubble.” Miffed by the deprecating analysis, Michael O’Leary apparently visited Lobbenberg at his Bishopsgate office.
It was at that point the analyst issued another downbeat assessment, reckoning it was overvalued by 25%.
Lobbenberg argued that O’Leary could not justify his claim he could retain profit margins of 20%.
Lobbenberg also accused the outspoken Ryanair boss of denying the cost implications if the European Commission rules against the group on the financial incentives paid to it by Charleroi airport outside Brussels.
However, the report said Lobbenberg was not crowing about his vindication. He has accused the airline of being “in denial” about the extent of its problems. Analysts in Dublin are not as bearish. They are confident it has hit a temporary glitch.
