We Lower Wizz Air’s Fair Value Estimate Due to Uncertainty in Ukraine and Soaring Fuel Costs

We lower our fair value estimate for no-moat Wizz Air to GBX 5,800, from GBX 6,800, as we prolong the recovery in air traffic, lower our long-term growth rate, and incorporate higher fuel costs. The group is highly exposed to the Central and Eastern European region that could see negative demand implications from the evolving war in Ukraine. We lower passenger traffic for the 2023 financial year to 43 million passengers, from 51 million, and also decrease our five-year growth rate for passenger numbers by 2 percentage points to 13% per year, from 15% previously. Higher fuel costs will hurt profitability in the near term as the group is largely unhedged.