Wizz Air: There are two kinds of carriers in this world… (HOLD - transfer of coverage)
…those with loaded guns and those who dig, as Clint Eastwood lays out in his captivating performance in Sergio Leone’s classic. Using its low costs to intimidate rivals, while benefitting from its exposure to the fast-growing CEE markets, Wizz Air strikes us as one of the most attractive equity stories in the CEE universe over the mid- to long-term. However, we see several potential headwinds in the near term, including the risk of overcapacity, economic slowdown, USD strength and an elevated customer compensation bill (EU261). Gradually moving towards cost leadership, we expect Wizz Air to withstand any industry-wide pressure better than most. However, it is not cheap, trading more than one standard deviation (SD) above its 3Y average EV/EBITA relative to its Global LCC peers. It also trades on a par with Ryanair, vs. which it has traded at a discount historically. As such, we maintain our HOLD rating, as we transfer coverage of Wizz Air, setting our 12M price target (PT) at GBp 3,333/share, offering 9% upside from current levels.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.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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