Broker tips: Wizz Air, Sabre Insurance

(Sharecast News) - Barclays upgraded Wizz Air on Thursday to 'equalweight' from 'underweight' and lifted its price target on the stock to 1,100.0p from 900.0p as it said the decision to exit Abu Dhabi was a "strategic positive". "We think it is a very positive move by Wizz to exit its Abu Dhabi operations," the bank said. "We have been consistently sceptical of Wizz's Mid-east expansion, seeing Wizz disadvantaged in accessing key traffic rights."

It noted that the business has lost around €40.0m over the past two years and said it sees little hope of this improving, given regulatory constraints.

Looking forward, Barclays said the key change that it would like to see from Wizz is a significant cut to its growth plans from around 20% per annum to single-digit growth rates. Barclays thinks that Wizz was driven to open the Abu Dhabi base specifically because it had more aircraft than it could sensibly deploy in its strategic strength market.

"If Wizz can reduce its growth plan to a modest single-digit growth rate, then we see it being able to leverage its strong market position in CEE successfully," it said. "We also would like to see Wizz cancel its orders for the A321XLR aircraft, which is not in our view well suited for LCC operations. We expect flag carriers to successfully use this aircraft, with premium seating and some cargo revenues."

Analysts at Berenberg slightly lowered their target price on Sabre Insurance from 202.0p to 200.0p on Thursday ahead of the group's H1 results later this month.

Berenberg noted that since its annual general meeting on 22 May, Sabre's share price was up 22% against a flat Stoxx Insurance index.

Although Berenberg expects to see a continuation in 2025 of the soft top-line trend developments seen since Q324, it also said it was "increasingly optimistic" about Sabre's long-term potential due to improving market conditions and the roll-out of its new IT platform in late H2/early FY26.

"Consequently, we believe the company can materially outperform consensus expectations in FY 2026 and FY 2027," said the German bank, which reiterated its 'buy' rating on the stock.

"Sabre trades on 9.1x Bloomberg 2026E EPS estimates, which is a 20% discount to the company's historical five-year average, with a 2025 dividend yield of 7.4%."