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Deutsche Lufthansa AG (DLAKY)
OTHER OTC:DLAKY
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Deutsche Lufthansa AG
(OTC:DLAKY)
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Rating:71Outperform
Price Target:
$11.50
▲(18.43% Upside)
The score is driven by improving but still mixed fundamentals (thin, compressing margins; meaningful leverage; modest free-cash-flow conversion) and a constructive technical uptrend. Valuation is a key positive with a low P/E and a supportive dividend, while the latest earnings call was optimistic on demand and operations but tempered by yield and cost/tariff pressures.
Positive Factors
Revenue diversification
Lufthansa's business spans passenger, cargo, ancillary services, MRO and loyalty, plus alliance reach. That structural diversification smooths cyclical airline demand, provides higher‑margin third‑party revenue and reduces single‑market exposure over the medium term.
Improving revenue and profitability
Revenue growth and positive TTM margins reflect sustained demand recovery and scaling of operations since pandemic lows. Stable profitability, even if thin, supports ongoing operational viability and provides a platform for targeted reinvestment and debt reduction over the next several quarters.
Fleet modernization & capacity growth
Aggressive fleet renewal and measured capacity growth improve long‑run unit economics through better fuel efficiency, lower maintenance and a refreshed premium product. This bolsters competitive positioning on long‑haul routes and reduces structural cost per ASK over time.
Negative Factors
Elevated leverage
Material leverage leaves the company exposed to downturns or higher rates; interest and principal service can constrain strategic flexibility. With notable debt relative to equity, balance sheet risk can amplify earnings volatility and limit capacity for opportunistic investment over months ahead.
Thin and compressed margins
Margins remain thin and have eroded versus prior year, reflecting intense competition and limited pricing power. Persistent margin compression reduces buffer for cost shocks, making earnings more sensitive to fuel, fees and yield pressures across the medium term.
Modest free cash flow conversion
Positive but limited FCF relative to net income means profits are not translating into large surplus cash. This constrains debt paydown, capex funding and shareholder returns without external financing, limiting financial flexibility over the next several quarters.
Deutsche Lufthansa AG (DLAKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.67B
Dividend Yield3.41%
Average Volume (3M)6.02K
Price to Earnings (P/E)6.0
Beta (1Y)0.75
Revenue Growth8.52%
EPS Growth96.29%
CountryUS
Employees102,574
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.94
Shares Outstanding1,199,282,800
10 Day Avg. Volume0
30 Day Avg. Volume6,024
Financial Highlights & Ratios
PEG Ratio-0.14
Price to Book (P/B)0.64
Price to Sales (P/S)0.20
P/FCF Ratio-1.23K
Enterprise Value/Market Cap2.05
Enterprise Value/Revenue0.61
Enterprise Value/Gross Profit4.89
Enterprise Value/Ebitda4.65
Forecast
1Y Price Target
$11.61Price Target Upside19.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Deutsche Lufthansa AG Business Overview & Revenue Model
Company DescriptionDeutsche 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 MoneyLufthansa generates revenue primarily through the sale of airline tickets, which constitutes the bulk of its earnings. The company has multiple revenue streams, including passenger services, cargo services, and ancillary services. Passenger services include ticket sales for both domestic and international flights, while cargo services encompass freight transport. Additionally, Lufthansa earns significant income from ancillary services such as baggage fees, onboard sales, and loyalty programs like Miles & More. The company also benefits from its partnerships and alliances, including the Star Alliance network, which enhances its market reach and customer base. Furthermore, Lufthansa engages in maintenance, repair, and overhaul services for third-party airlines, contributing to its revenue diversification. Factors such as fuel prices, economic conditions, and travel demand significantly influence the company's earnings.
Deutsche Lufthansa AG Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 06, 2026
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant operational and financial achievements, including capacity growth and fleet modernization. However, these were offset by challenges such as yield pressures, external costs, and tariff impacts in MRO.Q3-2025 Updates
Positive Updates
Capacity and Revenue Growth
Global capacity grew by 3.2% compared to the previous year, with total revenue increasing by EUR 500 million to EUR 11.2 billion. This was driven by a moderate capacity growth and robust demand, particularly in the North Atlantic region.
Operational Stability and Customer Satisfaction
Flight operations stabilized with a regularity rate of 99% and an improvement in departure punctuality by more than 10 percentage points. Customer satisfaction increased by 8 percentage points compared to the previous year.
Cargo and MRO Divisions
Lufthansa Cargo's adjusted EBIT reached EUR 49 million, a EUR 11 million increase from the previous year. Lufthansa Technik reported a 10% revenue growth, driven by a 28% increase in third-party business.
Fleet Modernization
Lufthansa plans to take delivery of over 50 next-generation aircraft by the end of next year, enhancing its premium product offerings and operational efficiency.
Negative Updates
Yield Softness and Currency Impact
The Passenger Airline business experienced a 2.2% decline in unit revenues due to yield softness in competitive markets and a weak U.S. dollar. Adjusted for currency effects, unit revenues were stable.
External Cost Pressures
Rising costs affected the industry, with fees and charges increasing by 9% and ATC costs rising by 17%. These pressures offset the benefits of lower fuel costs.
Tariff Challenges in MRO
Lufthansa Technik's adjusted EBIT declined by EUR 31 million due to tariffs, supply chain disruptions, and currency effects, impacting the division's profitability.
Company Guidance
During the Lufthansa Group Q3 2025 Results Conference Call, the company provided a positive outlook for the remaining months of the year, with key performance indicators (KPIs) showing improvements. The airline's regularity reached 99% and departure punctuality improved by over 10 percentage points compared to the previous year. Total revenue for Q3 increased by EUR 500 million to EUR 11.2 billion, with an adjusted EBIT of EUR 1.3 billion, stable compared to last year. Year-to-date, there has been a EUR 300 million improvement compared to 2024. Lufthansa's passenger airlines reported a 3.2% capacity growth globally, with significant increases on North Atlantic routes. Despite some yield softness, excluding currency effects, Revenue per Available Seat Kilometer (RASK) remained stable. Looking forward, Lufthansa plans continued growth on the North Atlantic and cautious growth in Asia, with promising demand from Japan, South Korea, and India. The company is optimistic about its future, supported by ongoing high demand, fleet renewal, and operational stability.Deutsche Lufthansa AG Financial Statement Overview
Summary
Deutsche Lufthansa AG has shown strong revenue growth and improved leverage post-pandemic. However, challenges remain with profitability margins and cash flow generation, indicating areas for improvement.Income Statement
Deutsche Lufthansa AG has shown a strong recovery in revenue growth, especially post-pandemic, with a 5.9% increase from 2023 to 2024. The gross profit margin improved significantly from negative in 2020 to positive in 2024. However, the net profit margin decreased from 4.7% in 2023 to 3.7% in 2024, indicating some efficiency challenges. EBIT and EBITDA margins have also decreased slightly, suggesting room for improvement in operating efficiency.72
Positive
Balance Sheet
The debt-to-equity ratio remains high, though it has improved from 11.4 in 2020 to 1.23 in 2024, indicating better leverage management. The equity ratio has improved over recent years, reaching 24.5% in 2024, reflecting a more stable financial position. However, the high level of debt still poses potential risks. ROE increased to 11.9% in 2024, showing better returns for shareholders.58
Neutral
Cash Flow
Free cash flow has been volatile, with significant negative values in 2020 and 2024. The operating cash flow to net income ratio is relatively strong at 2.82, but the free cash flow to net income ratio is negative, indicating challenges in generating free cash flow. The company needs to focus on improving its cash flow generation to support long-term growth.63
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 39.09B | 37.58B | 35.48B | 32.77B | 16.81B | 13.59B |
| Gross Profit | 4.90B | 4.83B | 7.43B | 4.62B | -3.00M | -2.98B |
| EBITDA | 5.15B | 4.66B | 5.33B | 3.73B | 96.00M | -5.65B |
| Net Income | 1.81B | 1.38B | 1.67B | 791.00M | -2.19B | -6.77B |
Balance Sheet | ||||||
| Total Assets | 48.83B | 47.05B | 45.32B | 43.34B | 42.54B | 39.48B |
| Cash, Cash Equivalents and Short-Term Investments | 11.02B | 8.49B | 8.27B | 8.30B | 7.60B | 5.38B |
| Total Debt | 16.99B | 14.23B | 13.95B | 15.17B | 16.69B | 15.38B |
| Total Liabilities | 43.95B | 35.46B | 35.61B | 34.86B | 38.05B | 38.10B |
| Stockholders Equity | 11.36B | 11.54B | 9.66B | 8.40B | 4.45B | 1.35B |
Cash Flow | ||||||
| Free Cash Flow | 668.94M | -6.00M | 895.00M | 2.66B | -700.00M | -3.58B |
| Operating Cash Flow | 4.54B | 3.89B | 4.95B | 5.17B | 618.00M | -2.33B |
| Investing Cash Flow | -3.66B | -2.33B | -2.98B | -3.44B | -3.02B | -2.34B |
| Financing Cash Flow | -978.57M | -1.45B | -2.07B | -2.27B | 2.87B | 5.08B |
Deutsche Lufthansa AG Technical Analysis
Neutral
9.71
Price Trends
9.62
Positive
9.16
Positive
8.60
Positive
Market Momentum
0.08
Positive
44.90
Neutral
9.94
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLAKY, the sentiment is Neutral. The current price of 9.71 is below the 20-day moving average (MA) of 10.07, above the 50-day MA of 9.62, and above the 200-day MA of 8.60, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 44.90 is Neutral, neither overbought nor oversold. The STOCH value of 9.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DLAKY.
Deutsche Lufthansa AG Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $35.14B | 13.17 | 28.67% | 1.37% | 14.75% | 71.73% | |
74 Outperform | $36.74B | 11.37 | 25.59% | ― | 4.24% | 20.29% | |
73 Outperform | $45.99B | 9.19 | 27.78% | 0.96% | 4.33% | -1.58% | |
71 Outperform | $11.67B | 6.02 | 15.52% | 3.41% | 8.52% | 96.29% | |
66 Neutral | $22.30B | 65.71 | 4.22% | 1.73% | 0.65% | ― | |
64 Neutral | $10.15B | 18.48 | ― | ― | 1.27% | 118.64% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
DLAKY
Deutsche Lufthansa AG
9.71
3.93
67.88%
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70.43
2.90
4.29%
RYAAY
Ryanair Holdings
68.28
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65.77%
LUV
Southwest Airlines
43.12
11.71
37.26%
UAL
United Airlines Holdings
113.49
2.97
2.69%
AAL
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15.37
-3.27
-17.54%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.