Last Update 22 Dec 25

Fair value Increased 1.42%

LHA: Mixed Ratings And Fleet Delays Will Shape Recovery Path Ahead

Analysts have nudged their fair value estimate for Deutsche Lufthansa slightly higher to roughly EUR 8.01 from about EUR 7.89, citing moderately stronger revenue growth expectations and a higher future earnings multiple, despite ongoing profitability and macro headwinds reflected in mixed recent price target revisions.

Analyst Commentary

Recent Street research on Deutsche Lufthansa presents a mixed outlook, with price targets clustering below the updated fair value estimate and ratings skewed toward caution. While some adjustments acknowledge incremental improvement, the prevailing view still reflects concern about the company’s ability to sustain profitable growth after a weak 2024.

Bullish Takeaways

Bullish analysts view the recent uplift in certain price targets as recognition that traffic recovery and revenue trends may be stabilizing. This, in turn, could support gradual multiple expansion from depressed levels.
The modest upward price target revision from JPMorgan signals that, even within a cautious framework, there is room for upside if Lufthansa executes on cost discipline and capacity management.
Supportive voices highlight that the current share price already discounts many of the known macro and operational headwinds. This creates potential valuation asymmetry if earnings surprise to the upside.
Some bullish analysts argue that a normalized operating environment, combined with disciplined capital allocation, could narrow the gap between intrinsic value estimates and the more conservative Street targets.

Bearish Takeaways

Bearish analysts emphasize that multiple recent ratings skew toward Underweight or Neutral, with target prices in the EUR 5 to EUR 7.30 range. This implies limited upside or even downside relative to the latest fair value estimate.
The downgrade from Buy to Neutral, alongside a reduced price target, underscores concerns about execution risk, particularly around improving margins after a weak 2024 earnings profile.
Initiation with an Underweight rating and a low price target reflects skepticism that Lufthansa can fully offset structural cost pressures and competitive intensity in the medium term.
Overall, the concentration of targets below intrinsic value estimates indicates investor hesitation about the timing and durability of any recovery in profitability and return on capital.

What's in the News

Morgan Stanley initiated coverage of Lufthansa with an Underweight rating and a EUR 5.40 price target, citing ongoing headwinds following a weak 2024 (Morgan Stanley).
Boeing's 777X entry into commercial service has slipped to early 2027 from 2026. Launch customer Lufthansa has already excluded the jet from its fleet plans until 2027, signaling planning for the delay (Bloomberg).
Turkish Airlines publicly denied media reports that it is negotiating to acquire all shares of SunExpress, affirming that the joint venture continues under the existing 50 50 ownership with Lufthansa and that there has been no change in the shareholding structure (Borsa Istanbul filing).
Separate reports indicate Turkish Airlines is interested in buying Lufthansa's 50 percent stake in SunExpress to accelerate expansion on Europe Middle East routes, but Lufthansa is said to be resisting due to confidence in the carrier's profitability. The company has declined to comment on the discussions (Corriere della Sera).

Valuation Changes

The Fair Value Estimate has risen slightly to about €8.01 from roughly €7.89, reflecting modestly stronger fundamentals in the model.
The Discount Rate has fallen slightly to approximately 8.71 percent from about 8.82 percent, indicating a marginally lower perceived risk profile.
Revenue Growth has increased moderately to around 3.95 percent from roughly 3.46 percent, implying a somewhat more optimistic top line outlook.
The Net Profit Margin has fallen meaningfully to about 4.10 percent from roughly 4.91 percent, signaling lower expected profitability despite higher revenue growth.
The Future P/E has risen noticeably to about 6.8x from roughly 5.7x, suggesting a higher assumed valuation multiple on forward earnings.

Elevated expectations for revenue and margin growth may be unrealistic due to rising costs, softening demand, and operational complexities.
Structural market shifts and integration risks could limit competitive advantages, premiumization benefits, and long-term earnings momentum.
Fleet modernization, operational improvements, diversified earnings, strategic acquisitions, and digitalization are strengthening financial stability, efficiency, and long-term competitiveness.

Catalysts

About Deutsche Lufthansa

Operates as an aviation company in Germany and internationally.What are the underlying business or industry changes driving this perspective?

The market appears to be pricing in sustained, above-trend revenue growth for Lufthansa driven by elevated post-pandemic travel demand, continued international expansion (e.g., ITA Airways integration and additional wide-body deliveries), and successful upselling to premium and ancillary products-despite mounting evidence of softening yields and mixed forward bookings in key markets, which could undercut top-line expectations.
Expectations for material margin expansion may be overly optimistic, as rising location-based charges, regulatory taxes, and persistent labor cost inflation in Europe are structurally raising Lufthansa's cost base faster than productivity savings or digitalization measures can offset, putting downward pressure on net margins.
The current valuation seems to assume that Lufthansa will maintain a competitive advantage from its early adoption of fleet modernization and sustainable aviation fuel (SAF), yet delayed aircraft deliveries, block-seating, and the ongoing high cost of SAF undermine the pace and scale of cost savings and environmental differentiation, thereby limiting near-term and medium-term earnings growth.
Investor optimism around premiumization (e.g., Allegris, personalized service, higher willingness to pay) may ignore increasing demographic headwinds in Europe, the permanent shift in business travel patterns toward remote/hybrid work, and growing consumer and governmental pressure for short-haul modal shift to rail, all of which could structurally cap future high-margin revenue streams.
Significant faith is being placed in the company's multi-brand structure, international partnerships, and network effects to drive sustained earnings momentum, but operational complexity, integration risks (e.g., ITA, Technic, Cargo), and intensifying price competition from low-cost carriers and alternative transport modes threaten both operating efficiency and long-term return on capital.

Deutsche Lufthansa Earnings and Revenue Growth

Deutsche Lufthansa Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Deutsche Lufthansa's revenue will grow by 3.9% annually over the next 3 years.
Analysts assume that profit margins will shrink from 4.6% today to 4.2% in 3 years time.
Analysts expect earnings to remain at the same level they are now, that being €1.8 billion (with an earnings per share of €1.44). However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €2.1 billion in earnings, and the most bearish expecting €1.2 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 6.5x on those 2028 earnings, up from 5.2x today. This future PE is greater than the current PE for the GB Airlines industry at 5.2x.
Analysts expect the number of shares outstanding to grow by 0.14% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.21%, as per the Simply Wall St company report.

Deutsche Lufthansa Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Lufthansa's ongoing fleet modernization-introducing next-generation, more fuel-efficient, and premium-equipped aircraft-will reduce operating costs and deliver visible financial benefits from 2026 onwards, supporting revenue growth, improved net margins, and enhanced customer satisfaction.
Successful execution of the Lufthansa Airlines turnaround plan, which is already showing tangible improvements in operational stability, punctuality, and productivity, is translating directly into lower irregularity costs, higher ancillary revenues, and a stronger financial foundation for sustainable earnings improvement.
Diversification and resilience of earnings through strong performance in Lufthansa Cargo and Lufthansa Technik (MRO), both of which benefit from macroeconomic volatility and long-term structural demand, provide stable revenue streams and protect group earnings in challenging passenger markets.
Integration and synergy realization from ITA Airways-already contributing positively to EBIT and ahead of expectations-combined with harmonization of digital platforms and frequent flyer programs, supports further network expansion, revenue synergy capture, and overall group earnings.
Strategic digitalization, automation, and centralized management of route networks are enabling Lufthansa to drive ongoing efficiency gains and cost reductions, supporting margin resilience and improved competitiveness in the face of external pressures.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €7.654 for Deutsche Lufthansa based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €12.0, and the most bearish reporting a price target of just €5.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €43.3 billion, earnings will come to €1.8 billion, and it would be trading on a PE ratio of 6.5x, assuming you use a discount rate of 9.2%.
Given the current share price of €7.69, the analyst price target of €7.65 is 0.5% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

LHA: Market Headwinds And Aircraft Delays Will Shape Earnings Recovery Prospects