WizzAir in favourable position to weather sector shake-out, HSBC says

1st Oct 2015 11:59

(ShareCast News) - Thanks to its high profitability and niche position low-cost carrier Wizz Air is in a favourable position to weather increased competition and stands to benefit from the turbulence which some of its competitors have run into, analysts at HSBC said.As well, its CEE market is less exposed to "competitive growth", the broker emphasised.Furthermore, its low unit costs means it can compete with Ryan Air - the European cost leader - toe-to-toe.The Dublin, Ireland-based carrier is moving into the CEE market, but its strategic thrust is aimed at major airports and business traveller markets, while Eastern European flag carriers continue to offer poor competition.Indeed, WizzAir stands to gain from the delays in the privatisation of Poland´s flag carrier LOT.For those reasons, analyst Andrew Lobbenberg maintained his 'buy' recommendation on the stock while upping its target price to 2,220p from 1,900p."Given its track record selling down after other IPOs, we would not be surprised, and also not concerned, by a placing from the major holder of convertibles, Indigo Partners."As of 11:58 shares of Wizz Air were 0.10% lower to 2,045p, after setting a fresh intra-day record at 2,060p.