WizzAir shares being tipped in the 'Telegraph':
Bradley Gerrard: Wizz Air
Airlines made the headlines for all the wrong reasons in 2017 with several failures and Ryanair’s pilot rostering travails leading to a swathe of winter flight cancellations. But an airline could still help lift your portfolio. Wizz Air’s shares almost doubled in 2017 in spite of – and because of – the chaos around it, and there are signs upward momentum remains. The low-cost carrier rapidly expanded its presence at Luton airport to become the second biggest airline there, acquiring take-off and landing slots left vacant by the collapsed Monarch Airlines. It made the airport its first UK base and will move from just one plane there to seven by the summer.
Wizz is also more exposed to faster growing economies in Eastern and Central Europe, regions that don’t have a large contingent of legacy airlines to stifle its growth ambitions. Analysts at Royal Bank of Canada say valuation metrics suggest the shares are close to the level Ryanair traded at in 2004/2005 when the Irish carrier was a similar size and was “about to embark on four years of 20pc per year expansion”. Wizz’s management has also been proactive in regards to Brexit, applying for a UK operating licence that could provide some protection in the event of a disastrous EU divorce.
The company has also placed an order for 146 Airbus A320 Neos (taking it to a total of 282 outstanding orders) thanks to its €1bn free cash pile. Owning more planes should over time reduce lease costs. Wizz upped its full-year profit guidance in November and there is potential for the carrier to surprise on the upside again in future years.