On Tuesday, Citi maintained its Sell rating on Wizz Air Holdings Plc (LON:WIZZ:LN) (OTC: WZZZY) shares, with the price target set at GBP19.00. Following a discussion with the Chief Financial Officer of Wizz Air, the firm highlighted several factors influencing the airline's outlook. The short-haul market is expected to need incentives in the coming months to boost summer bookings, which are currently trending higher than the previous year.
The airline has experienced a recent increase in flight cancellations, attributed to air traffic control issues and weather disruptions. This trend is anticipated to exert additional pressure on the company's costs in the first quarter. Additionally, the turnaround time for engine shop visits, previously under 70 days, has now extended to approximately 300 days before the engines are back in operation.
Wizz Air has also acknowledged the recent announcement by Airbus regarding potential delays in delivering A320 aircraft. The company has factored these delays into its capacity growth projections through the fiscal year 2026. Despite these challenges, Wizz Air's financial and operational strategies are being adjusted to manage the current industry environment.
InvestingPro Insights
Based on recent data from InvestingPro, Wizz Air Holdings Plc (WZZZY) presents a mix of financial indicators and market performance that investors may find intriguing. With a market capitalization of $2.81 billion and a revenue growth of 30.22% in the last twelve months as of Q4 2024, the company is showcasing its ability to expand in the competitive Passenger Airlines industry. Additionally, the company's stock has experienced a significant 35.32% year-to-date total return, reflecting a strong market performance in the short term.
InvestingPro Tips highlight that Wizz Air operates with a significant debt burden and its short-term obligations exceed its liquid assets, which may raise concerns about the company's financial flexibility. However, it is also trading at a low earnings multiple, with a P/E ratio of 9.31, suggesting that the stock could be undervalued relative to its earnings potential. Analysts predict that the company will be profitable this year, which is supported by a profitable last twelve months as of Q4 2024.
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