Proactive Investors - Wizz Air Holdings PLC (LON:WIZZ) provides attractive growth prospects worthy of a rating upgrade, according to UBS analysts.
Raising the airline’s rating from a ‘neutral’ to a ‘buy,’ UBS said the airline “should continue to take market share over the next five-plus years".
“We continue to see upside risk to our forecasts,” analysts added in a note, given Wizz’s cost base and focus on central and eastern European markets.
According to UBS, it was “surprising” that Wizz shares came under pressure after the company reported an anticipated net loss last week.
Wizz had forewarned investors of the loss, instead choosing to focus on an expected return to profitability in 2024, following the sector’s hit from Covid-19.
Positive summer travel trends, strong annual traffic growth and the fact that Wizz was the only low-cost carrier to give specific guidance for the year ahead prompted UBS’s rating hike.
Wizz also saw its share price target lifted from 3,400p to 4,300p by the bank, marking a prospective rise of 52% on Tuesday’s close.
Purchases of new Airbus aircraft should also see Wizz increase capacity by 30% come 2024, UBS noted, ahead of the airline increasing its fleet from around 179 to 450 planes by 2030.
Shares were up 0.8% at 2,852p on Wednesday.