No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - RBC Capital Markets nudged down its price target on Wizz Air on Monday to 1,200p from 1,250p as it updated estimates following the airline's first-half results last week.
The bank said it was changing its EBITDA(R) forecasts by -1%/ +5%/ -1.5% in FY26E/ FY27E/ FY28E.
"Our forecasts are below consensus," RBC said. "We cut both revenue per available seat kilometre and also fuel cost forecasts in FY26E-FY27E, and model lower capacity growth from FY28E."
The bank said its price target is a function of FY28E EV/ EBIT, a year of around 13 grounded aircraft on average, on its estimates, down from 35 in FY26E.
"As a result, we look beyond current suppressed margins in FY26E-FY27E, but don't give Wizz Air full credit for a potential further margin recovery from FY29E," it said.
"We model gradual margin improvement over FY26E-FY30E although with reduced sale-and-leaseback gains (as aircraft deliveries are increasingly taken into ownership) one factor limiting the pace back improvement."
The bank noted that Wizz plans a capital markets day, which it said will be an opportunity to detail a route to higher earnings, although RBC would expect the market to view delivery on longer term ambitions as a "show me story" given some previous misses/downgrades.
RBC maintained its 'sector perform' rating on the stock.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.