Berenberg raises target price on Wizz Air

Analysts at Berenberg raised their target price on budget airline Wizz Air from 4,800.0p to 5,000.0p on Friday, stating the group was on track to bounce back from the Covid-19 pandemic better than ever.

Berenberg highlighted that through a difficult quarter, Wizz management maintained its conviction in doubling the airline's size in five years.

During that period, Berenberg expects to see earnings improve at a compound annual growth rate of 10%, despite setbacks stemming from the Covid-19 pandemic, and also stated that Wizz Air now offers "the quickest near-term recovery" in its airline coverage.

"Management appeared most sanguine about demand prospects for its Abu Dhabi joint venture, where it has now based four aircraft. Wizz expects a faster resumption in travel there due to the UAE's plans to vaccinate half of its population before April," said the analysts.

"Its sole-provider positions offer pricing protection as demand returns, softening the risk of discounting against competitors to drive passenger volume. The airline remains opportunistic with airports. This has meant a tilt towards western Europe in recent months, but management suggested commitment to central and eastern Europe."

The German bank also nudged its near-term estimates slightly higher after a third-quarter performance that was "modestly ahead" of its expectations and kept its 'buy' rating on the stock unchanged.