Berenberg raises target price on Wizz Air

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.