We cut our TP to 40.3 GBP/sh, remain Buy-rated
Following recent announcements, we revisited our estimates for Wizz Air. As a result, we
remain Buy-rated for the stock, but cut our TP to GBP 40.3 GBP/sh, reflecting capacity
reduction for the next months. However, we hold the view that Wizz Air is a unique
investment opportunity, and the stock can easily double once covid disappears.
We cut our earnings estimates for financial Q2 ended on 30 September and the rest of the
financial 2021, but we left our forecasts unchanged going forward at this stage, taking into
account the limited visibility. We expect a net loss of EUR 286mn for FY21 vs. our prev.
estimate of EUR -206mn.
Wizz Air is indisputably financially one of if not the strongest airlines in Europe, which
makes them peerless in some aspects. Speaking with CEO, he confirmed that the
company hasn’t burnt cash since the end of financial Q1, which could cause a positive
price reaction after the release of Q2 results scheduled for the 5th of Nov. It means that
they still have EUR 1.5 bn in cash on hand to withstand nearly 20 months in case of full
grounding, in our view.
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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