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Wizz Air (WIZZLN 26s; Ba1 S /NR /BBB- Neg) 4Q24 Earnings Next Thursday

TRANSPORTATION

Wizz26s was only screen cheap we have in the sector (on the offer side) - mids have moved another -15bps in since continuing a strong ~50bp turn in since Mid-April - might be hard to find offer side from here on in/priced to FV.

  • We don't expect FY24 earnings to be risk event - it gave narrow revenue (€5.05-5.1b) & net income (€350-370m) FY guidance range late last month & gave broad strokes for FY25 - including margin improvement & further net debt reduction - both reflected in analyst consensus.
  • As reminder the €500m Jan 26s line is most of the corporate debt it has - remaining ~€4.8b in operating leases. Line is callable (at par) from November next year. Liquidity not a issue (cash at ~€1.6b), leverage is down from peak weakness in earnings - but still high at 5.2x.
  • Its guiding to that coming down on continued headline earnings recovery - Moody's upgrade back into IG looks likely on consensus FY25 earnings - that's priced here now - carry & roll down still there (offer side Z+74/€95/4.1%).

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