Model update – delivering guidance is a bit challenging
We slightly cut our target price from 32.0 GBP/sh to 31.0 GBP/sh, however, we remain BUY-rated on the stock. This reflects the weaker than earlier expected fiscal Q3 results, which we expect to be disappointing. Wizz Air will report its fiscal Q3 earnings on the 25th of January, BMO. We significantly cut our estimates for the quarter ended on the 31st of December, driven by the Middle East tension and operational hiccups. Softening demand, which we expect, could also raise concerns among investors, so the updated guidance will likely be disappointing. Compared to our previous estimates, Wizz may have operated less, but longer flights during the quarter, suggesting that they could continue to shift their operations toward the Middle East despite the war.
Wizz Air Holding is a European airline. As of Mar 31 2017, Co. provided more than 500 routes from 28 bases, connecting 141 destinations across 42 countries. Co. has two reportable segments: the airline and the tour operator business units, marketed under the Wizz Air and Wizz Tours brand names, respectively. Wizz Air sells flight tickets and related services to external customers and, to an extent, to Wizz Tours. Wizz Tours sells travel packages to external customers covering the network of Wizz Air.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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