Deutsche Lufthansa (LHA) AI Stock Analysis

• Market Cap: €8.59B
• Dividend Yield: 4.21%
• Average Volume (3M): 6.02M
• Price to Earnings (P/E): 7.0
• Beta (1Y): 1.32
• Revenue Growth: 6.98%
• EPS Growth: -12.63%
• Country: DE
• Employees: 102,574
• Sector: Industrials
• Sector Strength: 90
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.74
• Shares Outstanding: 1,200,015,000
• 10 Day Avg. Volume: 5,629,080
• 30 Day Avg. Volume: 6,021,249
• PEG Ratio: -0.57
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.50
• 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: €6.26
• Price Target Upside: -14.13% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 77 Outperform
• Price Target: €8.50 ▲(16.60%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 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 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

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
38.32B	37.58B	35.44B	32.77B	16.81B	13.59B
	Gross Profit
5.50B	4.83B	5.24B	4.62B	-3.00M	-2.98B
	EBIT
1.35B	1.54B	2.46B	1.23B	-2.32B	-7.09B
	EBITDA
4.17B	4.30B	5.33B	3.85B	31.00M	-5.49B
	Net Income Common Stockholders
1.23B	1.38B	1.67B	791.00M	-2.19B	-6.77B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.49B	8.49B	8.27B	8.30B	7.60B	5.38B
	Total Assets
47.05B	47.05B	45.32B	43.34B	42.54B	39.48B
	Total Debt
14.23B	14.23B	13.95B	15.17B	16.69B	15.38B
	Net Debt
12.44B	12.44B	12.36B	13.38B	14.45B	13.66B
	Total Liabilities
35.46B	35.46B	35.61B	34.86B	38.05B	38.10B
	Stockholders Equity
11.54B	11.54B	9.66B	8.40B	4.45B	1.35B
Cash Flow		Free Cash Flow
512.00M	-6.00M	659.00M	2.66B	-700.00M	-3.58B
	Operating Cash Flow
4.33B	3.89B	4.71B	5.17B	618.00M	-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	-2.27B	2.87B	5.08B

Deutsche Lufthansa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 Positive. The current price of 7.29 is above the 20-day moving average (MA) of 6.86, above the 50-day MA of 6.39, and above the 200-day MA of 6.19, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 68.31 is Neutral, neither overbought nor oversold. The STOCH value of 76.90 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LHA	77 Outperform	€8.59B	6.96	12.35%	4.21%	6.98%	-12.63%
Sector *	66 Neutral	$4.50B	12.29	5.40%	248.66%	4.13%	-12.33%
0O1R		€5.90B	14.08	9.15%	―	―	―
0NBI		€1.79B	53.62	5.42%	0.44%	―	―
0NW7		€3.40B	14.80	12.50%	4.86%	―	―
0NW8		€3.40B	10.79	12.50%	6.70%	―	―
8TRA	74 Outperform	€14.60B	5.80	14.10%	5.82%	-2.53%	-4.91%