Financial Trading Blog

Stock of the day 24/05/2019 – Wizz Air Holdings PLC



Will Wizz Air be forced into an emergency landing following Friday’s full year results?


After a bumpy end to 2018, the low-cost airline has managed to right itself somewhat in 2019. Opening at £27.34, it climbed past £35 for the first time in just over 9 months at the start of May. However, since then it has come under pressure, briefly falling back towards £30. Wizz Air Holdings PLC now sits at a current trading price of £31.01 (Spreadex, 24/05/2019).


(Source: Spreadex, 24/05/2019)

The company’s post-close trading update in early April was very positive. Its March 2019 traffic statistics showed that load factors were up 2.6 percentage points to 94.1% year-on-year, with a passenger-pleasing 10 percentage point increase in on-time performance to 85%.

More importantly, it said its net profit for the financial year would be at the upper half of the €270 million to €300 million guidance range. At a mid-point of €285 million, that’d be a 3.6% improvement on 2018’s record €275 million – a significant slowdown on that year’s 22.1% increase, a fair whack below the €310 million to €340 million announced at the end of 2018’s annual results.

As for its new financial year, Wizz said it had got off to a good start, with revenue per available seat per kilometre growth forecast at 4% for the first quarter following an 18% rise in available seat per kilometre. Ex-fuel cost per ASK, meanwhile, should be broadly flat year-on-year.

In terms of Friday’s results, obviously the first hurdle for the company to clear is making sure its net profit is at the top end of estimates. Beyond that, the outlook for the ‘all-important’ summer trading period, alongside the forecasts for FY20 as a whole, could dictate the market reaction.

Wizz Air Holdings PLC has a consensus rating of ‘Buy’ alongside an average target price of £34.19.

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