Deutsche Lufthansa (LHA) AI Stock Analysis

• Market Cap: €9.23B
• Dividend Yield: 3.9%
• Average Volume (3M): 5.47M
• Price to Earnings (P/E): 7.5
• Beta (1Y): 1.38
• Revenue Growth: 6.98%
• EPS Growth: -12.63%
• Country: DE
• Employees: 102,574
• Sector: Industrials
• Sector Strength: 94
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.74
• Shares Outstanding: 1,200,015,000
• 10 Day Avg. Volume: 4,405,172
• 30 Day Avg. Volume: 5,467,207
• PEG Ratio: -0.64
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.27
• 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: €6.46
• Price Target Upside: -15.99% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 77 Outperform
• Price Target: €8.50 ▲(10.53%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

Business Diversification

The Lufthansa group is highly diversified and more resilient than peers, with its passenger business complemented by a dominant maintenance, repair and overhaul (MRO) business and considerable freighter operations.

Earnings

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 Position

Enviable competitive position with its multi-brand strategy and leading market positions.

Negative Factors

Cost Pressures

Persistent cost inflation and prolonged airport capacity constraints could lead to earnings disappointment.

Macroeconomic Conditions

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 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 its passenger airline operations, which account for the majority of its income. This includes ticket sales, ancillary services like baggage fees and onboard sales, and premium cabin offerings. The logistics division, primarily Lufthansa Cargo, contributes to its earnings by providing air freight services globally. The MRO segment offers aircraft maintenance, repair, and overhaul services to other airlines and generates additional revenue. Furthermore, Lufthansa's catering business, LSG Sky Chefs, supplies in-flight catering services to numerous airlines. Strategic partnerships and code-sharing agreements with other airlines also play a significant role in expanding its market reach and increasing passenger volumes. The company's membership in the Star Alliance enhances its network connectivity, providing access to a broader customer base and contributing to its overall revenue.

Deutsche Lufthansa Financial Statement Overview

Summary

Deutsche Lufthansa's financial performance shows a strong recovery in revenue and improving cash flow, but challenges remain in operational efficiency and high leverage.

Income Statement

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

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

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.58B	35.44B	32.77B	16.81B	13.59B
Gross Profit	4.83B	5.24B	4.62B	-3.00M	-2.98B
EBITDA	4.30B	5.33B	3.85B	31.00M	-5.49B
Net Income	1.38B	1.67B	791.00M	-2.19B	-6.77B
Balance Sheet
Total Assets	47.05B	45.32B	43.34B	42.54B	39.48B
Cash, Cash Equivalents and Short-Term Investments	8.49B	8.27B	8.30B	7.60B	5.38B
Total Debt	14.23B	13.95B	15.17B	16.69B	15.38B
Total Liabilities	35.46B	35.61B	34.86B	38.05B	38.10B
Stockholders Equity	11.54B	9.66B	8.40B	4.45B	1.35B
Cash Flow
Free Cash Flow	-6.00M	659.00M	2.66B	-700.00M	-3.58B
Operating Cash Flow	3.89B	4.71B	5.17B	618.00M	-2.33B
Investing Cash Flow	-2.33B	-2.94B	-3.44B	-3.02B	-2.34B
Financing Cash Flow	-1.45B	-2.07B	-2.27B	2.87B	5.08B

Deutsche Lufthansa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 7.69 is above the 20-day moving average (MA) of 7.39, above the 50-day MA of 7.12, and above the 200-day MA of 6.43, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 66.76 is Neutral, neither overbought nor oversold. The STOCH value of 87.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:LHA.

Deutsche Lufthansa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LHA	77 Outperform	€9.23B	7.45	12.35%	3.90%	6.98%	-12.63%
Sector *	65 Neutral	$11.06B	15.73	5.16%	1.93%	3.12%	-25.59%
0O1R	―	€6.04B	14.45	9.15%	―	―	―
0NBI	―	€1.91B	55.23	5.42%	0.39%	―	―
0NW7	―	€4.01B	17.84	12.50%	2.79%	―	―
0NW8	―	€4.01B	11.86	12.50%	4.27%	―	―
8TRA	74 Outperform	€16.49B	6.49	14.10%	5.15%	-2.53%	-4.91%