Deutsche Lufthansa (LHA) AI Stock Analysis

• Market Cap: €8.84B
• Dividend Yield: 4.15%
• Average Volume (3M): 3.76M
• Price to Earnings (P/E): 5.0
• Beta (1Y): 1.38
• Revenue Growth: 6.03%
• EPS Growth: 78.04%
• Country: DE
• Employees: 102,574
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.84
• Shares Outstanding: 1,200,249,100
• 10 Day Avg. Volume: 3,245,714
• 30 Day Avg. Volume: 3,762,536
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €7.32
• Price Target Upside: 1.24% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 65 Neutral
• Price Target: €8.00 ▲(10.65% Upside)

Deutsche Lufthansa's strong financial performance, particularly in revenue growth, is a major positive. However, technical indicators suggest bearish momentum, and high leverage with declining free cash flow presents risks. The low P/E ratio and attractive dividend yield offer valuation appeal.

Positive Factors

Revenue Growth

Strong revenue growth signifies a successful recovery and expansion in market reach, enhancing long-term business stability and potential profitability.

Profitability

Improved margins indicate effective cost management and operational efficiency, which can sustain profitability and competitive positioning over time.

Network and Alliances

Membership in the Star Alliance strengthens Lufthansa's market position by expanding its network and customer base, providing a durable competitive advantage.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting long-term financial stability and ability to invest in growth.

Declining Free Cash Flow

Declining free cash flow suggests challenges in converting profits into cash, which may hinder future investments and financial resilience.

Delayed Fleet Expansion

Delays in fleet expansion with the 777X could impact capacity growth and operational efficiency, affecting long-term competitiveness and market share.

Deutsche Lufthansa Business Overview & Revenue Model

Company Description

Deutsche Lufthansa AG operates as an aviation company in Germany and internationally. The company's Network Airlines segment offers passenger services. Its Eurowings segment provides passenger services through a route network of more than 100 destinations in over 50 countries. The company's Logistics Business segment offers transport services for various cargoes, including general cargo, dangerous goods, valuables, vulnerable, perishables, live animals, courier, emergency, airmail/e-commerce, and temperature sensitive goods services approximately 300 destinations in 100 countries. Its Maintenance, Repair and Overhaul Services (MRO) segment provides maintenance, repair, and overhaul services for civilian commercial aircraft serving original equipment manufacturers and aircraft leasing companies, operators of VIP jets, and airlines. The company's Catering Business segment engages in-flight services and convenience retail, as well as other areas, such as retail and food producers. As of December 31, 2021, it had a fleet of 713 aircraft. Deutsche Lufthansa AG was founded in 1926 and is headquartered in Cologne, Germany.

How the Company Makes Money

Lufthansa generates revenue primarily through the sale of passenger tickets and freight services. The passenger segment accounts for a significant portion of its income, driven by both business and leisure travel. Additional revenue streams include ancillary services such as baggage fees, seat selection, and in-flight sales. The company also earns income from its cargo operations, which transport goods globally. Partnerships with other airlines through code-sharing agreements and its membership in the Star Alliance further enhance its revenue by expanding its network and customer base. Additionally, Lufthansa benefits from its maintenance, repair, and overhaul (MRO) services, catering services, and leasing of aircraft, which contribute to its overall profitability.

Deutsche Lufthansa Financial Statement Overview

Summary

Deutsche Lufthansa shows strong revenue growth and improved profitability, with an impressive 82.2% revenue growth rate. However, high leverage and declining free cash flow pose risks, necessitating a focus on cost management and cash flow improvement.

Income Statement

Deutsche Lufthansa has shown a strong recovery in its income statement metrics. The TTM (Trailing-Twelve-Months) revenue growth rate is impressive at 82.2%, indicating a robust recovery post-pandemic. Gross profit margin and net profit margin have improved over the years, reflecting better cost management and profitability. However, EBIT and EBITDA margins have seen some fluctuation, suggesting potential volatility in operational efficiency.

Balance Sheet

The balance sheet shows a moderate level of stability. The debt-to-equity ratio has improved from previous years but remains relatively high at 1.36, indicating significant leverage. Return on equity is strong at 16.68%, showing effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced asset structure.

Cash Flow

Cash flow metrics present a mixed picture. While operating cash flow remains healthy, the free cash flow has seen a significant decline, with a negative growth rate of -74.02% in the TTM period. The operating cash flow to net income ratio is stable, but the free cash flow to net income ratio is low, indicating potential challenges in converting profits into free cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.63B	37.58B	35.44B	32.77B	16.81B	13.59B
Gross Profit	5.49B	4.83B	5.24B	4.62B	-3.00M	-2.98B
EBITDA	3.96B	4.30B	5.33B	3.85B	31.00M	-5.49B
Net Income	1.77B	1.38B	1.67B	791.00M	-2.19B	-6.77B
Balance Sheet
Total Assets	48.14B	48.16B	46.16B	44.26B	43.49B	40.07B
Cash, Cash Equivalents and Short-Term Investments	8.59B	8.49B	8.27B	8.30B	7.67B	5.46B
Total Debt	14.02B	14.23B	13.95B	15.17B	16.69B	15.38B
Total Liabilities	37.80B	36.56B	36.45B	35.78B	39.00B	38.69B
Stockholders Equity	10.29B	11.54B	9.66B	8.40B	4.45B	1.35B
Cash Flow
Free Cash Flow	133.00M	-6.00M	659.00M	2.66B	-700.00M	-3.58B
Operating Cash Flow	3.88B	3.89B	4.71B	5.17B	618.00M	-2.33B
Investing Cash Flow	-2.85B	-2.33B	-2.94B	-3.44B	-3.02B	-2.34B
Financing Cash Flow	-947.00M	-1.45B	-2.07B	-2.27B	2.87B	5.08B

Deutsche Lufthansa Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:LHA, the sentiment is Negative. The current price of 7.23 is below the 20-day moving average (MA) of 7.41, below the 50-day MA of 7.68, and above the 200-day MA of 6.91, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 41.68 is Neutral, neither overbought nor oversold. The STOCH value of 21.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:LHA.

Deutsche Lufthansa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIX2	75 Outperform	€3.19B	12.39	14.91%	3.59%	9.68%	17.82%
FRA	74 Outperform	€7.23B	18.11	8.49%	―	3.38%	-14.57%
SIX3	74 Outperform	€3.19B	9.01	14.91%	5.04%	9.68%	17.82%
8TRA	72 Outperform	€13.29B	6.10	12.80%	6.57%	-2.98%	-14.55%
LHA	65 Neutral	€8.84B	4.97	17.73%	4.15%	6.03%	78.04%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HHFA	57 Neutral	€2.09B	59.71	5.02%	0.47%	16.39%	87.55%