Berenberg reiterates 'buy' rating on Wizz Air following Q1 results
By Iain Gilbert
Date: Thursday 29 Jul 2021
(Sharecast News) - Analysts at Berenberg took a fresh look at low-cost carrier Wizz Air on Thursday following the firm's first-quarter trading update a day earlier.
Berenberg said despite Wizz Air's slight miss to consensus estimates for net income in the first quarter, it was now turning its focus to "much-anticipated" bookings improvements.
The German bank stated these drove free cash generation and improved the firm's operational outlook for the coming months towards 2019 levels, with management now guiding for a "reasonable" net income in the second quarter of 2022.
"We increase our outer year estimates to account for stronger passenger numbers in summer 2022 and beyond after Wizz announced it would accelerate ten aircraft deliveries," said the analysts, who kept their 'buy' rating and 5,500.0p target price on the stock.
"Wizz Air is now trading on a P/E of c17x for FY23E, versus Ryanair on 13.5x, a c25% premium versus that falls to 9% on our FY24 estimates. We continue to like the carrier for its industry-leading growth and margin profile in the medium term."
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