RYAOF - Wizz Air: Undervalued Amidst Engine Crisis

2025-05-05 02:15:19 ET

Summary

• Wizz Air remains a buy despite fleet groundings, showing a 24% stock gain, while the S&P 500 lost 6.7% since my last report.
• Fleet growth is promising with 13 new A321neo airplanes, but 40 planes remain grounded, impacting capacity and growth.
• The stock is undervalued given the company's strong execution amid engine issues, with a 41% upside based on FY24 earnings.
• Significant upside potential exists beyond FY25, but due to uncertainties, I conservatively value the stock based on FY24 earnings, maintaining my buy rating.

I covered Wizz Air ( WZZAF ) (WZZZY) in January with a buy rating. It’s not an easy stock to invest in due to the grounding of a significant portion of its fleet. Since my last report, the stock has gained 24% while the S&P 500 lost 6.7% of its value. This, of course, supports my bullish view on the company. The stock price remains 34% below the prices seen at the time of publication of my first buy rated report in April 2023....

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