Analyst Jaina Mistry of Jefferies reiterated a Sell rating on Wizz Air Holdings, retaining the price target of £9.50.
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Jaina Mistry has given her Sell rating due to a combination of factors affecting Wizz Air Holdings. The company’s decision to exit its Middle East venture, specifically its Abu Dhabi operations, is a significant factor. This move is aimed at refocusing on Central and Eastern Europe, but it also involves costs related to the exit, which could offset any potential financial benefits. The closure of this loss-making unit, which represents a notable portion of the group’s available seat kilometers, adds pressure to the company’s financial outlook.
Additionally, Mistry highlights the risks associated with Wizz Air’s ambitious growth plans, particularly the planned increase in available seat kilometers. This growth could lead to overcapacity in core markets, especially if fleet deliveries are not deferred. Furthermore, the company faces potential competitive threats and pressure on yields, which could impact earnings and lead to a de-rating risk. Mistry’s estimates for the company’s future earnings are significantly below consensus, reinforcing her Sell recommendation.
Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of WIZZ in relation to earlier this year.