Deutsche Lufthansa (LHA) AI Stock Analysis

• Market Cap: €7.76B
• Dividend Yield: 4.54%
• Average Volume (3M): 6.67M
• Price to Earnings (P/E): 6.3
• Beta (1Y): 1.33
• Revenue Growth: 6.98%
• EPS Growth: -12.63%
• Country: DE
• Employees: 102,574
• Sector: Industrials
• Sector Strength: 81
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.74
• Shares Outstanding: 1,200,015,000
• 10 Day Avg. Volume: 5,823,861
• 30 Day Avg. Volume: 6,671,483
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: €6.60
• Price Target Upside: 2.01% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

Deutsche Lufthansa's overall stock score reflects a balanced view of its financial recovery, technical trends, and attractive valuation. While revenue growth and cash flow improvements are positive, high leverage and operational inefficiencies pose challenges. The stock's valuation appears favorable, enhancing its attractiveness to investors seeking value and income.

Positive Factors

Financial Performance

Strong cost control led to an adjusted EBIT that was 4% higher than expected, driven by passenger airlines.

Future Growth

Guidance for FY25 points to significant EBIT growth, driven by cost savings, fleet renewal, and an enviable competitive position with its multi-brand strategy and leading market positions.

Market Position

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.

Negative Factors

Cost Management

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

Macroeconomic Factors

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, 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 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
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
	EBIT
1.54B	2.46B	1.23B	-2.32B	-7.09B
	EBITDA
4.30B	5.33B	3.85B	31.00M	-5.49B
	Net Income Common Stockholders
1.38B	1.67B	791.00M	-2.19B	-6.77B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.49B	8.27B	8.30B	7.60B	5.38B
	Total Assets
47.05B	45.32B	43.34B	42.54B	39.48B
	Total Debt
14.23B	13.95B	15.17B	16.69B	15.38B
	Net Debt
12.44B	12.36B	13.38B	14.45B	13.66B
	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: 6.47
• 50DMA: Negative
• 100DMA: Negative
• 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 6.47 is above the 20-day moving average (MA) of 6.21, below the 50-day MA of 6.79, and above the 200-day MA of 6.32, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.96 is Neutral, neither overbought nor oversold. The STOCH value of 75.43 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
BMW	75 Outperform	$46.35B	6.44	8.09%	7.58%	-8.44%	-34.89%
AIR	74 Outperform	$122.65B	27.62	21.75%	1.19%	5.16%	12.89%
LHA	71 Outperform	€7.76B	6.29	12.35%	4.54%	6.98%	-12.63%
MTX	70 Outperform	€17.14B	27.10	20.33%	0.62%	38.19%	―
TUI1	70 Outperform	€3.56B	6.55	58.94%	―	11.87%	23.89%
Sector *	64 Neutral	$4.25B	11.70	5.24%	249.79%	4.07%	-9.45%