WOOD Flash – Wizz Air: stock down on new CFO, probe in Hungary, and purchasing power concerns
On Monday (22 August), Wizz Air announced that its current CFO, Jourik Hooghe, had decided to step down and pursue other opportunities. His successor, Ian Malin, will be joining Wizz Air on 1 October, based in Budapest and reporting to CEO Jozsef Varadi. The stock reacted badly to the news, dropping 10% on the day of the announcement, with the pressure exacerbated by the increase in gas prices and its implications for consumers’ purchasing power, as well as the news about an investigation, on consumer protection grounds, launched into Wizz in Hungary. The highly volatile share price clearly illustrates, in our view, that investors are split on how difficult the winter might be, and whether or not the company will need to issue equity. As we discuss in detail in our 1Q FY23 results flash note, we do not see a capital increase as a base case, as long as airlines are allowed to fly in Europe (the reintroduction of COVID-19 restrictions could necessitate a capital increase at both Wizz Air and many of its peers, in our view). In this flash note, we summarise the recent newsflow on the stock. We reiterate our positive view on the shares at the current level.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.
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