Investors of Pantheon Resources (LSE:PANR) are understandably jumping with joy after its share price exploded by over 50% last week. The upward momentum was triggered by the release of a testing update from its Talitha #A oil project and has pushed its 12-month performance to over 230%!

As a reminder, this site is expected to contain up to 1.2 billion barrels of oil. And it’s been responsible for a lot of the volatility in the PANR share price seen in 2021. So what was in this update that has investors so excited? Or is this just a short-term boost that’s likely to collapse again in the near future? Let’s explore.

Unexpected positive results

On 7 February, management announced the completion of drilling tests on the Lower Basin Floor Fan of its Talitha #A project in Alaska. The objective was to verify the quality and presence of light oil. This was successful. However, that doesn’t appear to be behind the surging PANR share price.

These tests were performed around 10 miles away from the optimal development location. Yet despite this, the company achieved an average flow rate of 73 barrels per day over three days. And on the last day of testing, the rate had stabilised at 40 barrels.

This is exceptionally encouraging news and beats all of management’s expectations, especially since the drilling test site is in a sub-optimal location. In other words, this is a strong indicator that flow rates at the selected ideal development site could be many times higher.

Considering there were fears that the entire project could be unviable last year following disappointing earlier tests, I’m not surprised to see the stock surge on this news. But are investors getting ahead of themselves? Maybe. Let’s take a step back.

The risks surrounding the Pantheon Resources (PANR) share price

As encouraging as these results are, it’s important to remember that any form of commercial production has yet to begin. Although this might change later in the year depending on the drilling results of its Alkaid 2 well this summer.

Looking specifically at these latest results, they indicate the possibility of a high flow rate at the selected development site. But, in the words of CEO Jay Cheatham, “it does not guarantee success”. The company is performing further tests, gathering more data to verify its findings and confirm the potential viability of this project.

Let’s assume these future tests all deliver positive results, and Pantheon Resources begins production soon. Will the PANR share price climb further? I certainly think it’s possible. But as with any oil company, the group is ultimately at the mercy of fluctuating oil prices.

Currently, the value of the commodity is climbing rapidly, but that inevitably won’t always be the case. Should oil prices collapse in the future, as they have done in the past, then the stock could be in for quite a beating.

Time to buy?

Personally, it’s too soon for me to invest in this business. For now, I’m going to wait for the results of the next set of tests before deciding whether or not to add this company to my portfolio. But I will admit, following this latest update, I am cautiously optimistic about the PANR share price.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Rolls-Royce (LSE:RR) shares remain a top pick for many UK investors despite the trouble caused by the pandemic. Even institutional investors have maintained their sizable positions throughout the past couple of years. But is this loyalty warranted?

Let’s explore the past decade of returns to see whether an investment in this business has been wise historically. And if that story can change moving forward.

Investigating the performance of Rolls-Royce shares

As I’ve said numerous times, popularity does not guarantee a good investment. In fact, it’s often the opposite. In February 2012, Rolls-Royce shares were trading at around 240p. Today, the stock is closer to 121p. That’s half its value wiped out!

To be fair, a lot of this decline is down to the pandemic. But even before the price crashed in 2020, the stock was only trading at 234p. In other words, after eight years, Rolls-Royce shares basically hadn’t moved. Meanwhile, the FTSE 100 had gained around 24% over the same period.

So far, this doesn’t look like it was a wise investment. But let’s not forget the contributions from dividends. Say I invested £1,000 into the engineering business back in 2012. That would give me around 416 shares, excluding any transaction costs.

Since 2012, the company has paid out a whopping grand total of 39.68p per share in dividends. That means my £1,000 investment would have generated an income of £165.07, or a 16.5% return. When combined with the share price movement, I’d now have a disappointing £669.24. And even before the pandemic started, I’d still be losing to the market.

Of course, past performance is not a good indicator of future results. So can Rolls-Royce shares change their lacklustre returns moving forward?

A lucrative long-term investment?

It’s no secret that the pandemic has decimated the travel sector. And since around half of Roll-Royce’s revenue stream comes from selling and servicing civil aircraft engines, this has had a pretty drastic knock-on effect for the business.

But there’s a possibility that Covid-19 may have been a positive influence. To weather the storm, the company is undergoing a pretty extensive structuring that trimmed a lot of fat from operations, opening the door to higher efficiency.

The group is by no means in tip-top shape when looking at the balance sheet. But with large chunks of non-core assets being sold off, cash flows are expected to improve that can be used to reduce its leverage.

The competitive arena of the engineering sector does pose some challenges. But with such high barriers to entry, it’s unlikely management isn’t already aware of the main threats to the business and can act accordingly to mitigate any potential risks.

Of course, suppose the pandemic decides to punch the travel sector in the face again? In that case, the recovery of Rolls-Royce shares could take a lot longer than expected. Personally, I want to wait until the Covid-19 situation is over before considering this business for my portfolio. But I am cautiously optimistic about its long-term prospects.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The ITM Power (LSE:ITM) share price has been on quite a rollercoaster ride these past few years. After exploding to as high as 717p in early 2021, the green hydrogen stock has since collapsed to around 248p today. That’s a 65% decline in about a year.

Yet despite this downward trajectory, analysts at investment bank Jefferies have reiterated their price target of 800p. If they’re right, I could potentially triple my money through buying shares today. So, should I be adding this stock to my portfolio? Let’s explore.

Eruptive growth on the horizon?

As a reminder, ITM Power developed a proprietary electrolyser technology that can extract hydrogen from water without producing any harmful emissions in the process. It’s a significantly cleaner approach than the traditional methods relying on fossil fuels. And with demand for the element on the rise, forecasts for the hydrogen market are pretty bullish.

In fact, The Business Research Company released a report in November that predicted the global green hydrogen market will grow at an average rate of 39.4% annually until 2025! That’s a pretty massive tailwind for this business, especially since it’s ramping up its manufacturing facilities.

As the company has a considerable backlog of orders and contracts being negotiated growing by triple-digit rates, reaching these analyst price forecasts may not be as unrealistic as it seems. Even more so when the revenue stream is predicted to reach as high as £64m in 2023. By comparison, its revenue in 2021 came in at £4.3m. That’s a 1,520% predicted jump in two years.

Assuming it hits this revenue target, I wouldn’t be totally shocked to see the ITM Power share price triple as a consequence. But in my opinion, I think this is pretty unlikely.

The risks

Despite losing more than half its market capitalisation, the company still has a price tag of £1.6bn. Considering I just mentioned the current revenue stream sits at a measly £4.3m, the valuation is by no means cheap. And when I top this off with the fact that the group lacks any form of profitability, the risks of volatility in the ITM Power share price go through the roof.

To meet investor expectations, the company must somehow deliver £21.6m of revenue by the end of April this year. Looking at the latest interim results from October 2021, it took six months to generate only £4.2m. That’s why I don’t think the company will hit this target. And as with any stock whose valuation is driven by expectations rather than fundamentals, the ITM Power share price will likely continue its downward trajectory if I’m right.

The bottom line

The group’s technology seems to be a viable solution to a significant problem. And it could deliver explosive returns over the long term. But at today’s share price, investors in ITM Power are being too optimistic about the timeline needed for this growth. At least, that’s what I think.

With that in mind, I’m not tempted to add this business to my portfolio today, even with the staggering price forecasts from analysts.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

NIO (NYSE: NIO) stock took off towards the end of 2020, finishing the year on 1,400% returns. However, 2021 was a different story, with the Chinese electric vehicle (EV) manufacturer’s shares finishing the year over 35% lower. Currently down 28% year-to-date, are NIO shares about to surge? Let’s take a closer look.

Why NIO stock could rise fast

In my opinion, there are two main reasons why the stock could take off. Firstly, looking at its valuation, it seems very cheap to me. NIO is currently trading on a forward price-earnings (P/E) ratio of 3.8. Comparing this to industry leader Tesla‘s P/E ratio of 8.8, it does beg the question of whether NIO stock is undervalued. My fellow fool Zaven Boyrazian said that assuming NIO could match Tesla’s P/E ratio in the future, it would give the firm an $87bn market cap, which is over double the current value.

Coupling this low valuation with the extremely high growth that NIO has been able to achieve over the past few years gives me confidence in the stock’s ability to ‘explode’. For example, its January delivery data highlighted an impressive 33% increase in year-on-year production, with numbers reaching 9,652. Expanding this timeframe to the whole of 2021, the firm was able to increase its deliveries by 109% compared to 2020. If NIO can keep up these stellar results, I think it will only be a matter of time before the shares start to creep up again.

Headwinds

Although the shares are cheap and growth is high, there are a number of issues the firm must contend with over the coming months. Firstly, it faces huge pressure from Chinese regulatory forces. For example, the so-called ‘Uber of China’, Didi Global, announced that due to pressure from the Chinese government, it would be delisting its shares from US markets. If the same thing happens to NIO, then regardless of its high growth, there will be no US-listed shares to rise as a consequence.

Another risk the stock must contend with is the threat of rising global interest rates. US Inflation data came in at 7.5% year-on-year for January. While the Federal Reserve has not directly raised rates as of yet, a rate rise is expected in March. In the UK, the Bank of England has already begun hiking rates. When they rise, people are less likely to invest in the stock market as they can achieve a higher return on their savings. High-growth stocks such as NIO are usually hit hardest by this phenomenon. This could place a lid on the growth of the stock.

The verdict

While NIO stock possesses high-growth qualities, I think there are too many medium-terms risks facing the stock right now. So I don’t think we’re likely to see the stock explode in the short term. But I do think that if it can overcome the risks of interest rates and a Chinese regulatory crackdown, it could rise in the long term. I’m currently a NIO shareholder but would wait to see how these medium-term risks pan out before considering adding more shares to my portfolio.

Dylan Hood owns shares of NIO Inc. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Investing in the stock market is a great way to accumulate long-term wealth. However, it’s not easy picking the right investments. I believe that the trick to building wealth over the years is to pick an exchange traded fund (ETF) and invest in it regularly for a long time.

Where I’m looking

For my own portfolio, I’m interested in the S&P 500. This is widely considered the most important index in the US. It contains 500 large companies that are selected by a committee. Firms must have a big enough market cap, have at least 10% of shares outstanding and meet liquidity and profitability requirements.

It includes big-name companies such as Microsoft, Apple and Amazon. In terms of industries, the index includes a variety of sectors such as technology, retailers and banking.

One issue is that the index only includes companies from the US. It’s true that many of these companies derive some of their earnings from outside the US, but this percentage has been falling over time.

Another downside of buying the S&P 500 is that I limit my returns to those of the index. I could be wrong, but by perhaps by picking individual stocks I might be able to outperform it.

However, this index allows me to invest in a massive 500 companies by holding a single share. For me, it’s a low-cost way of diversifying across companies and sectors. I’m happy to forgo the possibility of a higher return from investing in individual companies for the ease of this diversification.

How much can I earn with an S&P 500 ETF?

Although the index does experience short-term volatility, it has recovered from every crash it’s ever experienced. It’s also earned an average rate of return of around 10% per year since 1957.

By my calculations, assuming a 10% annual return, by investing £50 a month in an S&P 500 ETF for 25 years I’d have close to £70,000.

Of course, I know it might not achieve that return and some believe the S&P 500 is overvalued. Though nothing is certain in investing, I’m hopeful that in the future we might see a strong performance. That’s why I think that by investing consistently over a long period of time, this ETF can be an unstoppable way of building wealth. 

Selecting an ETF

As such an important index and essential barometer of US stock market health, it’s no surprise that there are lots of ETFs available. Most, if not all, of the major investment firms offer such a fund.

The largest one listed in the UK is iShares Core S&P 500 UCITS ETF worth over $57bn. The cheapest one is Invesco S&P 500 UCITS ETF with an ongoing charge of 0.05%.

For my own portfolio, I’ve chosen Vanguard S&P 500 ETF, which takes a middle path in terms of size ($38bn) and costs (0.07%).

I believe that a long-term outlook and giving my money as much time as possible to grow is key to building retirement wealth. I’m going to continue investing as much as I can afford each month into this ETF as part of a balanced portfolio. 

Niki Jerath owns shares in Vanguard S&P 500 ETF. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon, Apple, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Some FTSE stocks attract short-sellers like bees to honey. Think battered cinema operator Cineworld or troubled white goods seller AO World. That said, there are other companies where this kind of attention is arguably more surprising. Let’s look at a couple of examples and see whether there’s a buying opportunity for me. 

Is the purple patch over?

It’s interesting to see Kingfisher (LSE: KGF) so high up the table of most hated stocks. Thanks to the explosion in the popularity of DIY over the pandemic and a very healthy housing market, investors might assume that short-sellers would have no interest in the B&Q and Screwfix owner. Then again, recent share price activity suggests otherwise.

Kingfisher certainly hasn’t had the best of starts to 2022. In sharp contrast to index peers like BT and BP, the valuation here has fallen 10% year-to-date. That’s not nearly as bad as the drops seen in tech companies, but it still implies that some in the market think the FTSE 100 member’s purple patch might be over.

Given the above, it’s clear that next month’s full-year results will receive a lot of attention. Back in November, Kingfisher’s share price wobbled after the company revealed like-for-like sales of £3.2bn in Q3 were down 2.4% compared to the same period in 2020.

Is this indicative of more people spending money on other things they couldn’t do previously? Or is it simply a natural fluctuation in earnings that all companies experience? We’ll find out soon enough.

In the meantime, Kingfisher’s stock was trading on a P/E of 11 as markets opened. It also comes with a 3.7% yield. That looks pretty reasonable to me. As things stand however, I’m content to sit on the sidelines and wait to see just how tricky the last quarter has been. 

Shorting target

Another FTSE share that makes the ‘most hated’ Top 10 list is Domino’s Pizza (LSE: DOM). Again, this seems a bit surprising.

Back in December, the company announced it had reached a resolution to a long-running feud with its franchisees. As part of the deal, Domino’s will invest £20m over three years in stores and online apps. Marketing will also be stepped up.

In return, franchisees are expected to open a minimum of 45 stores per annum in the next three years, test and roll out new tech, and get involved in national promotions.

As might be expected, this news sent the shares sharply higher. Unfortunately, a good proportion of these gains have since been lost. Shares have fallen back 16% year-to-date.

But maybe this selling pressure (and shorter interest) does make sense. Like Kingfisher, the trading tailwind from multiple UK lockdowns is now over. The sharp rise in the cost of living could also be relevant. When times are tough, it seems likely that more of us will shun a takeaway in favour of a cheaper, shop-bought alternative. 

As a side note, Domino’s net debt has climbed significantly in recent years. I’d prefer it to be going in the other direction.

But companies with franchise business models often prove to be great wealth-compounders over the long term. Domino remains a highly-cash-generative business and P/E of 19 is also roughly in line with the company’s average P/E over the last five years.

Domino’s has now been added to my watchlist. I wonder if this attention from short-sellers might prove short-lived.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

While I love dividends from my stocks, I love high ‘total returns’ (dividends and capital gains) more. Over the long term, high total returns are far more powerful than dividends alone from a wealth creation perspective.

With that in mind, I’m going to highlight two FTSE 100 dividend stocks that have considerable share price upside, according to City analysts. I own both of these stocks, and I’d be happy to buy more shares at current prices.

City analysts expect this FTSE 100 dividend stock to fly

Let’s start with financial data company Experian (LSE: EXPN), which is currently trading for around 3,000p, with a yield of around 1.3%. Here, analysts at JP Morgan Cazenove have a 12-month price target of 4,000p. That’s roughly 33% higher than the current share price.

While there’s no guarantee Experian will hit 4,000p any time soon (broker price targets should always be taken with a grain of salt), I can see why JP Morgan’s analysts see share price upside here.

For starters, demand for the company’s credit reports and scores is rising following the lifting of coronavirus restrictions. In January, the group reported a 14% increase in revenue for the final quarter of calendar 2021. It also said it’s expecting annual revenue to grow 16-17% this year.

Secondly, the stock is not that expensive, given the company’s market position, high level of profitability, and growth potential in today’s data-driven world. At present, the forward-looking price-to-earnings (P/E) ratio here is about 29, which seems very reasonable to me.

It’s worth pointing out that if sentiment towards technology stocks continues to deteriorate in 2022, this stock could underperform in the near term. Another risk to consider is disruption from new market participants.

I’m comfortable with these risks. I think this FTSE 100 stock has the potential to deliver attractive total returns in the year ahead.

A ‘reopening’ stock with huge upside

Another FTSE 100 dividend stock that has significant share price upside, according to the City, is joint replacement specialist Smith & Nephew (LSE: SN). It currently trades at around 1,220p with a prospective yield of about 2.3%. However, analysts at Berenberg have a price target of 1,840p. That implies upside of around 50%.

It’s pretty easy to see the bullish case here. Over the last few years, Smith & Nephew has experienced a lot of disruption from the coronavirus pandemic. Less elective medical procedures, along with supply chain disruptions, have hit revenues. As a result of these issues, its share price is way below what it was pre-pandemic.

Things are likely to get better here though. Supply chain disruptions won’t last forever. Meanwhile, there’s a huge backlog of joint replacement surgeries. As of mid-2021, there were over 160,000 Britons waiting for hip and knee replacements.

One risk to consider with SN is Covid-19 setbacks. If we see more variants emerge, the company’s recovery could be delayed.

I see the overall risk/reward proposition as attractive however. I think this FTSE 100 dividend stock is likely to do well in the years ahead as the world recovers from the pandemic.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Edward Sheldon owns shares in Experian and Smith & Nephew. The Motley Fool UK has recommended Experian and Smith & Nephew. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

When it comes to FTSE 100 stocks, I think the BAE (LSE: BA) share price stands out for its incredibly unique qualities. 

The global defence contractor is a one-of-a-kind in the UK market. It is the country’s largest defence company, and it has a global footprint with operations spanning as far as Australia. The company also has several other unique qualities that could help it outperform in an uncertain economic environment. 

BAE share price advantages

The defence industry is far more defensive than other sectors. Its primary customer tends to be the government, which has deep pockets and can sign multi-year contracts. Governments are the only real customers these companies can sign deals with in most situations. 

Unfortunately, this sector is also highly regulated. This means corporations like BAE do not have much flexibility in finding customers and signing international agreements. They have to follow many rules and regulations, and breaking these can result in severe financial penalties. 

Despite this challenge, the group’s defensive nature suggests the BAE share price could outperform the market as economic uncertainty builds.

According to the company’s latest update, its order backlog for the next few years stands at over £40bn, which locks in around two years of revenue for the group. The organisation is always looking for new opportunities, suggesting this backlog will only continue to expand in the years ahead.

BAE also has an advantage when it comes to technology. The company has developed some of the most advanced tech globally for the defence industry. This gives it a solid competitive advantage. 

Uncertainty grows

These advantages are just some of the reasons why I think the BAE share price could take off over the next few years. Governments worldwide are ramping up military spending, and one of the primary beneficiaries of this spending will be defence contractors. 

As one of the largest defence contractors in the world, with its portfolio of unique technologies, I think BAE will almost certainly benefit from this increased spending. The company is already returning significant amounts of cash to investors.

It has been repurchasing shares, and the stock currently offers a dividend yield of 4%. Considering the outlook for the organisation, I think it is likely management will continue to increase the dividend payout and other shareholder returns in the years ahead. 

Of course, dividend growth is far from guaranteed. If BAE finds itself on the wrong side of regulators and politicians, the company’s outlook could change overnight. This is something I will be keeping an eye on as we advance. 

Nevertheless, as the outlook for the global economy and geopolitical environment becomes more uncertain, I believe BAE can provide a safe harbour in stormy waters.

Considering its defensive nature and current dividend yield, I would buy the stock for my portfolio today. I cannot guarantee that the shares are about to take off. But I think there is a good chance they could outperform as uncertainty builds.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Key points

• Results for the last two fiscal years demonstrates the severe impact of the pandemic
• Countries like Sweden and Switzerland are tipped to fully reopen their borders, that may positively impact this FTSE 250 company’s share price
• Passenger numbers are up 318% for January 2022, year-on-year

The airline industry is perhaps the sector that has been battered most throughout the pandemic. Wizz Air (LSE: WIZZ) has been no exception. The share price of this FTSE 250 firm plummeted about 50% on the outbreak of Covid-19 in March 2020. With the improving situation globally, however, I think the prospects for this Hungary-based short-haul airline are significantly more positive. I’m following this stock closely to see if I should add it to my portfolio. Let’s take a closer look.

A hellish two years for this FTSE 250 stock

Recent results do not make pleasant reading for Wizz Air shareholders. Between fiscal 2020 and 2021, revenue fell sharply from €2.7bn to just €739m. This reflected the collapse in passenger demand during this time. Furthermore, the FTSE 250 company fell to a €566m loss with the previous year profit of €294m.

Consequently, earnings-per-share (EPS) were hit, swinging into negative territory. The travel sector’s recovery was further dented by the recent Omicron scare. This caused many countries around the world to tighten border restrictions. Results for the three months to 31 December 2021, however, showed a revenue increase of 172.5% year-on-year.

Some good news

As that shows, the news is not all negative. The Omicron variant indicated that the virus itself was becoming less severe. A number of countries have recently suggested that they will be reopening their borders. This may be regardless of vaccination or testing status and would benefit the FTSE 250 firm.

Sweden will soon be opening to EU citizens in what will essentially be a return to pre-pandemic travel. Furthermore, a decision is due by the Swiss Federal Council on 16 February. This potentially means that all international travellers can enter Switzerland, regardless of vaccination and testing status. If such a decision is made, I suspect many more countries will follow suit. FTSE 250 travel firms, like Wizz Air, will surely benefit from these reopening moves.

The real benchmark for gauging the extent to which air travel is recovering, however, is passenger numbers. The company flew 2.39m passengers in January 2022, increasing 318% year-on-year. Furthermore, capacity for the same period increased 220% year-on-year, with a load factor of 79.6%.

This means that more aircraft are flying more passengers. This can be only good news for this business. All this news led JP Morgan to upgrade Wizz Air in January 2022. This was primarily because of its “unique growth opportunities” and “ultra-low costs”. 

There is no denying that this firm has endured a torrid time during the pandemic. However, more countries are considering reopening their borders and passenger data is more encouraging. I’m optimistic about Wizz Air’s prospects in the long term and will be buying shares in this airline business without delay.

Andrew Woods has no position in any of the shares mentioned. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.