Bernberg lowers target price on Wizz Air

by | Apr 20, 2022

Analysts at Berenberg slashed their target price on low-cost carrier Wizz Air from 4,400.0p to 3,500.0p on Wednesday, stating it was sitting on its hands despite a recent pullback in share price.
Berenberg said a significant pullback in shares may have tempted some, with shares down roughly 35% since mid-February and underperforming peers by about 15 percentage points.

However, while Berenberg agrees that at these levels the shares are beginning to look “more enticing” on a medium-term view, it also urged investors to exercise patience.

The German bank pointed to elevated near-term risks that have yet to fully feed through, like high fuel price exposure, falling network isolation, staff-cost inflationary pressures, and suboptimal asset utilisation, exacerbated by weak demand in eastern Europe.

“We have sympathy with those more constructive on a three- to five-year view, but for now see a more attractive risk/reward balance offered by the likes of Ryanair. We cut our FY23E net profit materially and our price target to 3,500p, maintaining our ‘hold’ rating,” said Wizz Air.

“The carrier is trading on 14.4x our FY24E versus a historical average of c13.4x, while we would also argue that visibility on this is extremely limited. In our view, the narrative will remain dominated by near-term headwinds in FY23E.”

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