Berenberg raises target price on Wizz Air
Wizz Air Holdings
2,240.00p
16:35 03/05/24
Analysts at Berenberg raised their target price on budget airline Wizz Air from 4,800.0p to 5,000.0p on Friday, stating the group was on track to bounce back from the Covid-19 pandemic better than ever.
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Berenberg highlighted that through a difficult quarter, Wizz management maintained its conviction in doubling the airline's size in five years.
During that period, Berenberg expects to see earnings improve at a compound annual growth rate of 10%, despite setbacks stemming from the Covid-19 pandemic, and also stated that Wizz Air now offers "the quickest near-term recovery" in its airline coverage.
"Management appeared most sanguine about demand prospects for its Abu Dhabi joint venture, where it has now based four aircraft. Wizz expects a faster resumption in travel there due to the UAE's plans to vaccinate half of its population before April," said the analysts.
"Its sole-provider positions offer pricing protection as demand returns, softening the risk of discounting against competitors to drive passenger volume. The airline remains opportunistic with airports. This has meant a tilt towards western Europe in recent months, but management suggested commitment to central and eastern Europe."
The German bank also nudged its near-term estimates slightly higher after a third-quarter performance that was "modestly ahead" of its expectations and kept its 'buy' rating on the stock unchanged.