Wizz Air share price plunged after earnings: Buy the dip?

August 03, 2023 05:30 AM PDT | By Invezz

Wizz Air share price plunged after earnings: Buy the dip? — Image source: Invezz

Wizz Air financial results

Aviation companies have reported strong financial results as demand continued surging in the second quarter. As I wrote here, IATA believes that airlines will deliver strong results this year as leisure and business travel rebounded.

Wizz Air published strong financial results for its first quarter. Its passenger count jumped from more than 12.1 million in Q1’22 to over 15.2 million in Q1’23. This translated to a surge in revenue, which rose to over €1.2 billion.

Wizz Air’s EBITDA jumped to over €236 million in the quarter from a loss of over €154.4 million. Most importantly, the company’s operating profit jumped to €79.9 million while its profit rose to €61.1 million. Its load factor jumped to 91.2%. In a statement, the company’s CEO said:

“We have continued our fleet allocation program and have announced further expansion in Poland, Italy, UK, North Macedonia, Georgia, and Albania. At Abu Dhabi airport, Wizz Air is already the second-largest airline in terms of seats. Its fleet is growing to 10 aircraft by the end of this summer.”

Wizz Air has been an embattled company in the past few years since its growth has been slower than other companies like EasyJet and Ryanair. Its stock price has plunged by about 60% from its highest level in 2020.

At the same time, the company has been criticised for extending its CEO tenure to help him unlock a bonus of 100 million pounds. Shareholder institutions like Glass Lewis and ISS have all recommended against the move.

Wizz Air share price forecast

WIZZ chart by TradingView

The daily chart shows that the Wizz Air stock price has been in a strong bearish trend in the past few weeks. This decline started when the shares peaked at 3,223p on May 17th. The stock has moved below the important support at 2,503p, the lowest level on February 23rd.

Further, the shares have dropped below the 50-day and 25-day exponential moving averages (EMA). At the same time, the Relative Strength Index (RSI) has moved downwards after peaking at 75 in January.

Wizz Air stock price formed a head and shoulders pattern. Therefore, the shares will likely continue falling in the coming days. If this happens, the stock will likely continue falling as sellers target the psychological level at 2,000p.

The post Wizz Air share price plunged after earnings: Buy the dip? appeared first on Invezz.

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