Sharecast - RBC Capital said it now forecasts net income of roughly €354.0m for Wizz in 2023/24, towards the lower end of the firm's €350.0m-400.0m guided range, and noted its largest downgrades were in 2024/25, reflecting guidance for flattish capacity.
However, the Canadian bank remained at 'outperform' on the stock, stating expectations on engine headwinds had now been rebased and said even a partial margin recovery offers scope for roughly 150% potential share price upside.
"We think delivery of Wizz Air (LON:WIZZ)'s FY23/24E guidance will require a resilient 2H given the company's exposure to Israel, and engine challenges. Mgmt expects an improved unit revenue performance in 4Q (when capacity growth steps down to +15% from +25% in 3Q)," said RBC. "Whilst visibility should be limited, we also see this as likely (with Easter timing supportive in 4Q). However, this means proof of delivery on 2023/24E will need to wait until FY results on 23 May."
RBC added that it expects Wizz Air to be past the worst of aircraft groundings by the second half of next year, allowing focus to shift to longer-term prospects.
Reporting by Iain Gilbert at Sharecast.com