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Deutsche Lufthansa AG (UK) (DE:LHA)
:LHA

Deutsche Lufthansa (LHA) AI Stock Analysis

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Deutsche Lufthansa

(LSE:LHA)

Rating:77Outperform
Price Target:
€8.50
▲(18.72%Upside)
Deutsche Lufthansa shows strong technical momentum and an attractive valuation, although financial performance is hampered by operational efficiency issues and high leverage. The lack of recent earnings call data limits visibility into management's forward guidance.
Positive Factors
Competitive Position
Enviable competitive position with its multi-brand strategy and leading market positions.
Earnings Improvement
FY fuel guidance is approximately €500m below consensus and mechanically drives around 27% full-year EBIT upgrades, more than offsetting the Q1 net profit miss.
Market Outlook
Current trading indicates booking trends suggesting a strong summer season ahead.
Negative Factors
Cost Pressures
Persistent cost inflation, prolonged airport capacity constraints, and volatility in crude oil/jet fuel prices could lead to earnings disappointment.
Macroeconomic Impact
Macroeconomic weakness and geopolitical tensions could curb discretionary spending on travel, with rising unemployment and higher cost of living in Europe leading to households cutting back on travel spending.
Operational Challenges
Lufthansa Airlines to continue experiencing operational challenges, unscheduled engine maintenance and delayed deliveries in FY25, underpinning a neutral stance on the group at this juncture.

Deutsche Lufthansa (LHA) vs. iShares MSCI Germany ETF (EWG)

Deutsche Lufthansa Business Overview & Revenue Model

Company DescriptionDeutsche Lufthansa AG, commonly known as Lufthansa, is one of the world's leading airline groups and the largest in Europe. Headquartered in Cologne, Germany, Lufthansa provides passenger air transport services and operates through several segments, including Passenger Airlines, Logistics, Maintenance, Repair and Overhaul (MRO), Catering, and others. The company is renowned for its extensive global network, serving numerous destinations across multiple continents, and is a founding member of the Star Alliance, the world's largest airline alliance.
How the Company Makes MoneyLufthansa primarily generates revenue through its passenger airline segment, which includes ticket sales for domestic and international flights. The company also earns income from ancillary services such as checked baggage fees, seat selection charges, and onboard sales. In addition to passenger transport, Lufthansa's logistics segment contributes to its revenue through the Lufthansa Cargo division, which handles air freight and logistics services worldwide. Maintenance, Repair, and Overhaul (MRO) services, offered by Lufthansa Technik, provide additional income by servicing and maintaining aircraft for other airlines. The catering segment, operated through LSG Sky Chefs, generates revenue by supplying in-flight catering services to a variety of airlines. Strategic partnerships and code-sharing agreements with other airlines further enhance Lufthansa's revenue streams by expanding its network reach and optimizing flight operations.

Deutsche Lufthansa Financial Statement Overview

Summary
Deutsche Lufthansa shows a strong recovery trajectory with notable revenue growth and improving cash flow. The income statement and balance sheet indicate growth, but operational efficiency and high leverage remain challenges.
Income Statement
75
Positive
The income statement reveals a strong recovery trajectory for Deutsche Lufthansa. The TTM (Trailing-Twelve-Months) gross profit margin stands at 14.34%, while the net profit margin is 3.21%. Revenue growth is notable, with a 7.74% increase from the previous year. However, EBIT and EBITDA margins have seen slight declines compared to the previous year at 3.53% and 10.88% respectively, indicating pressure on operational efficiency.
Balance Sheet
70
Positive
The balance sheet shows a relatively high debt-to-equity ratio of 1.34, indicating substantial leverage. However, the return on equity (ROE) is a solid 11.72%, reflecting effective use of shareholder funds. The equity ratio stands at 21.78%, suggesting a moderate level of financial stability with room for improvement in reducing leverage.
Cash Flow
60
Neutral
Cash flow analysis indicates positive trends with a 1853.33% increase in free cash flow from the previous year, reaching €512 million. The operating cash flow to net income ratio is 3.52, demonstrating strong cash conversion. However, the free cash flow to net income ratio is lower at 0.42, highlighting potential challenges in translating earnings to cash flow.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
38.32B37.58B35.44B32.77B16.81B13.59B
Gross Profit
5.50B4.83B5.24B4.62B-3.00M-2.98B
EBIT
1.35B1.54B2.46B1.23B-2.32B-7.09B
EBITDA
4.17B4.30B5.33B3.85B31.00M-5.49B
Net Income Common Stockholders
1.23B1.38B1.67B791.00M-2.19B-6.77B
Balance SheetCash, Cash Equivalents and Short-Term Investments
8.49B8.49B8.27B8.30B7.60B5.38B
Total Assets
47.05B47.05B45.32B43.34B42.54B39.48B
Total Debt
14.23B14.23B13.95B15.17B16.69B15.38B
Net Debt
12.44B12.44B12.36B13.38B14.45B13.66B
Total Liabilities
35.46B35.46B35.61B34.86B38.05B38.10B
Stockholders Equity
11.54B11.54B9.66B8.40B4.45B1.35B
Cash FlowFree Cash Flow
512.00M-6.00M659.00M2.66B-700.00M-3.58B
Operating Cash Flow
4.33B3.89B4.71B5.17B618.00M-2.33B
Investing Cash Flow
-2.81B-2.33B-2.94B-3.44B-3.02B-2.34B
Financing Cash Flow
-1.15B-1.45B-2.07B-2.27B2.87B5.08B

Deutsche Lufthansa Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.16
Price Trends
50DMA
6.39
Positive
100DMA
6.41
Positive
200DMA
6.18
Positive
Market Momentum
MACD
0.23
Negative
RSI
65.14
Neutral
STOCH
78.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:LHA, the sentiment is Positive. The current price of 7.16 is above the 20-day moving average (MA) of 6.82, above the 50-day MA of 6.39, and above the 200-day MA of 6.18, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 65.14 is Neutral, neither overbought nor oversold. The STOCH value of 78.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:LHA.

Deutsche Lufthansa Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
€3.50B15.0912.50%4.75%10.10%-12.20%
DELHA
77
Outperform
€8.59B6.9612.35%4.21%6.98%-12.63%
DEFRA
74
Outperform
€5.81B14.129.15%6.79%-3.02%
74
Outperform
€14.69B5.8314.10%5.82%-2.53%-4.91%
74
Outperform
€3.40B10.7012.50%6.70%10.10%-12.20%
66
Neutral
$4.50B12.285.32%248.52%4.13%-12.36%
66
Neutral
€1.79B53.625.42%0.44%15.53%112.91%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DE:LHA
Deutsche Lufthansa
7.16
1.22
20.47%
DE:FRA
Fraport AG Frankfurt Airport Services Worldwide
63.90
11.05
20.91%
DE:SIX2
Sixt SE
80.25
10.75
15.47%
DE:HHFA
Hamburger Hafen und Logistik
18.30
1.10
6.41%
DE:SIX3
Sixt SE
58.00
4.22
7.84%
DE:8TRA
TRATON SE
29.20
-0.49
-1.65%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.