RBC Capital trims Wizz Air price target as it updates estimates after H1

(Sharecast News) - RBC Capital Markets nudged down its price target on Wizz Air on Monday to 1,200p from 1,250p as it updated estimates following the airline's first-half results last week. The bank said it was changing its EBITDA(R) forecasts by -1%/ +5%/ -1.5% in FY26E/ FY27E/ FY28E.

"Our forecasts are below consensus," RBC said. "We cut both revenue per available seat kilometre and also fuel cost forecasts in FY26E-FY27E, and model lower capacity growth from FY28E."

The bank said its price target is a function of FY28E EV/ EBIT, a year of around 13 grounded aircraft on average, on its estimates, down from 35 in FY26E.

"As a result, we look beyond current suppressed margins in FY26E-FY27E, but don't give Wizz Air full credit for a potential further margin recovery from FY29E," it said.

"We model gradual margin improvement over FY26E-FY30E although with reduced sale-and-leaseback gains (as aircraft deliveries are increasingly taken into ownership) one factor limiting the pace back improvement."

The bank noted that Wizz plans a capital markets day, which it said will be an opportunity to detail a route to higher earnings, although RBC would expect the market to view delivery on longer term ambitions as a "show me story" given some previous misses/downgrades.

RBC maintained its 'sector perform' rating on the stock.