Wizz Air - Disappointing Q3 Cemented Our Bearish View
Disappointing Q3 cemented our bearish view
- We downgrade Wizz Air to Sell from Neutral and slightly cut our TP to 20.5 GBP/sh from 21.0 GBP/sh after the Company reported fiscal Q3 numbers today morning. This implies a roughly 30% downside to today’s closing price.
- The change in recommendation reflects our view that risks are skewed to the downside. In addition, CEE consumers are more or less squeezed due to the rising cost of living. We state that CEE consumers differ from WE consumers and the market fails to recognise it time by time. Despite pre-sales (or bookings) being ahead of the seasonal patterns according to both Wizz and its rivals, we anticipate that demand in CEE will need to be stimulated later in 2023, perhaps during peak summer as well. Having said that, we modelled a mid-single digit RASK improvement, in line with management’s guidance, but we are overly cautious about this Co.’s forecast. More importantly, Ryanair just this week announced an expansion in Budapest, so the highly anticipated pricing pressure could harm Wizz’s profitability in CEE in the peak season.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.