With travel expectations weakening as consumers hold back on spending, sellers are betting that one budget airline will fare worse than its European peers.
The shares offered for trading, which indicate short interest, represent 13% of Wizz Air Holdings Plc’s shares available for trading, according to the latest data from S&P Global Market Intelligence. That compares with less than 1% for rivals EasyJet Plc and Ryanair Holdings Plc.
Skeptics point to several reasons for the bearish bets: Wizz Air is far more indebted than its rivals, it has had engine trouble on its Airbus SE jets, and the Budapest-based airline flies mainly in and out of Eastern Europe, putting it close to war-torn Ukraine.
The stock, which trades in London, has fallen 41% this year to 1,311p, hit by a sharp drop in oil prices. Profit Warning In August, some analysts say the company could stumble again, given price competition among airlines.
“There’s a lot of uncertainty around Wiz’s ability to meet full-year guidance,” said Satish Sivakumar, an analyst at Citigroup Inc. He’s one of five analysts tracked by Bloomberg with a sell rating on the stock, a position he’s held since October of last year.
A Wizz Air spokesman declined to comment on the bearish bets on the stock.
The carrier is among those who were Most affected Due to engine problems requiring the Airbus A321 to be withdrawn early for maintenance. With aircraft availability uncertain, Wizz Air leased ready-to-fly aircraft to maintain its schedule, cutting into profits.
It has also suffered from price wars, with Ryanair forecast to Ticket prices The company’s shares could fall further, while debt is also an issue, said Gerald Koo of Panmure Liberum, who also has a sell recommendation on the stock.
“One of the key factors that differentiates Wizz Air on the one hand, and Ryanair and easyJet on the other, is leverage,” Coe said in emailed comments.
Wizz Air’s net debt is 4.6 times its annual earnings, while Ryanair and EasyJet have net cash, giving them much greater financial flexibility.
Investors’ preference for Wizz Air’s competitors is reflected in valuations. They are willing to pay 10.7 times earnings for Ryanair and 7.6 times for easyJet, compared with 5.3 times for Wizz Air.
Analysts also favour EasyJet and Ryanair over Wizz Air, based on their consensus rating – the average of buy, sell and hold recommendations.
However, analysts are generally bullish on the stock, which has nine buy, ten hold and five sell ratings. The average price target of 1,982p suggests a 51% return over the next year.
One optimist, RBC Capital Markets’ Ruairi Cullenani, said he expected Wizz Air to improve its margins back to pre-pandemic levels. Cullenani said this could happen in fiscal 2026 if the company can get back to capacity growth and has a more favourable fleet mix.
However, RBC’s earnings estimates are at the lower end of Wizz Air’s guidance range for this fiscal year, which ends in March, “implying risks to current-year guidance,” said the analyst, who has an outperform rating on the stock and sees it doubling next year.
Wizz Air has taken steps to boost profits again, in part by release British Airways Chief Executive Joseph Varadi said in an interview last week that the airline plans to launch a longer, cheaper flight to Saudi Arabia next year.