Barclays downgrades Ryanair and Norwegian Air on high fuel prices

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3▲4 ▼3Impact / 5
Summary · why it matters

Barclays downgraded Ryanair and Norwegian Air Shuttle to Equal Weight from Overweight, citing persistently high fuel prices that threaten fourth-quarter and 2027 profits across European airlines. Analysts led by Andrew Lobbenberg cut Ryanair's price target to €24 from €28.50 and Norwegian's to NOK 11.50 from NOK 20, with the bank now pricing estimates off the current fuel forward curve, producing moderate cuts for the rest of 2026 and larger ones in 2027 when hedging is lower. Barclays' estimates sit below Bloomberg consensus this year and, the analysts said, "very significantly" below next year. The crack spread between crude and kerosene has widened, offsetting any moderation in crude prices, and Barclays doubts airlines can pass the costs on, writing that "Airlines do not set fares - the market does." Low-cost carriers are most challenged because fuel is about 47% of revenue on Barclays' estimates, and Ryanair faces a hedging cliff with cover dropping from 80% in March 2027 to 15% in April. Barclays kept Underweight ratings on Lufthansa, Air France-KLM and Finnair, named IAG its preferred major airline, and kept Overweight ratings on Aegean, Jet2, TUI and Wizz, calling Wizz a "more speculative" call.

Impact on assets 9

Industrials± Mixed
Ryanair Holdings plc
RY4C
▼ NegativeCapitalrelevance

Barclays downgraded Ryanair to Equal Weight and cut its price target to €24 from €28.50 on high fuel costs and a hedging cliff.

Aegean Airlines S.A.
0OHY
▲ PositiveCapitalrelevance

Barclays kept its Overweight rating on Aegean, signaling relative analyst favorability versus downgraded peers.

Jet2 PLC
JET2
▲ PositiveCapitalrelevance

Barclays kept its Overweight rating on Jet2 amid the sector downgrades.

Deutsche Lufthansa AG
LHA
▼ NegativeCapitalrelevance

Barclays maintained its Underweight rating on Lufthansa, reflecting a negative analyst view.

Air France-KLM SA
AF
▼ NegativeCapitalrelevance

Barclays maintained its Underweight rating on Air France-KLM amid high fuel prices pressuring European airline profits.

Consumer Discretionary▲
TUI AG
TUI1
▲ PositiveCapitalrelevance

Barclays kept its Overweight rating on TUI, signaling analyst confidence despite the sector-wide fuel-cost downgrades.

Critical Materials & Supply Chain▲
Biotech & Genomic Medicine▲

Off-coverage companies 2

Norwegian Air Shuttle ASAi
Private▼ NegativeCapitalrelevance

Barclays downgraded Norwegian Air Shuttle to Equal Weight from Overweight and halved its price target to NOK 11.50 on high fuel costs.

Finnairi
Private▼ NegativeCapitalrelevance

Barclays kept its Underweight rating on Finnair as high fuel prices threaten European airline earnings.