Is It Time To Buy International Consolidated Airlns Grp SA, easyJet plc And Ryanair Holdings Plc?

Even after around 30 years of watching stock markets, I'm still often surprised by the fickleness of their reactions to news. So when I checked the full-year results highlights from International Consolidated Airlines(LSE: IAG) this morning and read of a 68% jump in pre-exceptional operating profit, I expected to see a share price rise. But no, the shares dropped 5% in morning trading to 530.5p -- as I write, they're only a fraction better than that at 531p.

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Basic EPS gained 52%, and at 20 eurocents per share the full-year dividend came in ahead of market forecasts with a 3% yield around the FTSE average. According to chief executive Willie Walsh, the results were "in line with our recent target and have exceeded our original 2015 operating profit target".

The results came after January's traffic statistics showed an 11.9% rise in revenue passenger kilometres over January 2015, so are the shares cheap on trailing P/E of only nine on today's figures and with two years of EPS growth forecast?

Meanwhile...

Over at easyJet(LSE: EZJ), which reported a 21% rise in EPS for the year ended September 2015, we've seen a 12-month share price fall over the past 12 months, to 1,478p. That's despite also reporting some very nice January passenger statistics -- the company carried 6.3% more passengers in the month than in January 2015, with a rolling 12-month figure up 7.2%.

There are modest EPS gains predicted for this year and next, which would drop the 2016 P/E to 10.4 and 2017's to a mere nine. Another bargain?

Healthy increase

Over at Ryanair Holdings(LSE: RYA) we've seen a 37% price rise in 12 months, to EUR13.85 (approximately 1,092p) as the company's PR efforts to turn around its unfortunate "treat the customers like dirt" image seem to be paying off.

January 2016 customer numbers stormed up by 25% over the same month a year previously, with a healthy 5% increase in the load factor too -- and there was a 17% rise in rolling 12-month traffic.

Ryanair's year ends on 31 March, and there's a very strong EPS gain predicted which would put the shares on a P/E of about 14. That might seem a bit toppy, but 2017 forecasts would drop it to 12.

Time to buy?

While all three of these look attractive to me on fundamentals, I'm always wary of investing in airlines as there's practically no product differentiation, intense competition and very little pricing power -- and I'm in good company, as Warren Buffett doesn't like airlines either.

And the upcoming EU referendum could have a big impact, with Ryanair having come out in strong support of staying in the EU. The firm pointed out that "EU open skies has transformed UK tourism & job creation prospects" -- and there could be suffering ahead if we lose out on that.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.