RBC has had enough, for now. It’s downgraded Wizz Air Holdings PLC (AIM:WIZZ) from “outperform” to “sector perform” and slashed its price target from £24 to £15, calling time on a recovery that’s taking longer than hoped.
The new target still implies some upside from the current share price, but the bank sees better bets elsewhere in the airline sector over the next 12 months.
So what’s gone wrong? Several things. First, 2025’s results came in worse than expected.
Net debt was higher than forecast, and the outlook for 2026 profit has been cut by nearly a third.
Add in rising costs, especially for engine maintenance and depreciation, and the path to recovery looks bumpier.
RBC still sees long-term promise. Wizz’s growing fleet of cost-efficient A321neo aircraft and its presence in Eastern Europe give it room to grow, just not soon.
The concern is that an ambitious expansion plan may need fare cuts to fill seats, denting margins in the short run.
Investors hoping for a quick turnaround may be disappointed.
But those willing to wait until 2027 or beyond may eventually be rewarded, especially if geopolitical risks like the war in Ukraine begin to ease. For now, though, RBC is stepping back.
A week of turbulence that has seen 25% wiped from the value of the budget airline continued on Friday with the stock off 2% at 1,183p.