Analysts have slightly lowered their price target for Deutsche Lufthansa, reducing it from €7.65 to €7.57. They cite continued industry headwinds and a cautious outlook on profitability and growth assumptions.
Analyst Commentary
Bullish Takeaways
- Bullish analysts recognize that Lufthansa has maintained a leading position in the European aviation sector despite recent volatility. This reinforces its long-term relevance.
- Cost-cutting measures and efforts to streamline operations could support incremental improvements in margin and operational efficiency.
- There is potential for passenger demand recovery as macroeconomic conditions stabilize, particularly if travel restrictions continue to ease.
Bearish Takeaways
- Bearish analysts remain cautious due to persistent competitive pressure, which may limit pricing power and revenue growth potential.
- Concerns linger regarding the company’s ability to navigate ongoing headwinds in the airline industry following a weak performance in 2024.
- The current price target reflects skepticism around the pace of profitability improvement and overall execution risk in a challenging environment.
- Macroeconomic uncertainties and increasing costs, particularly in fuel and labor, are expected to weigh on near-term earnings visibility.
What's in the News
- Morgan Stanley has initiated coverage of Lufthansa with an Underweight rating and a EUR 5.40 price target. The firm cites ongoing industry headwinds and challenges following a weak 2024 (Morgan Stanley).
- The commercial debut of Boeing's 777X aircraft, with Lufthansa as the launch customer, is now slated for early 2027 rather than 2026. Lufthansa is adjusting its fleet plans accordingly (Bloomberg).
- Lufthansa announced plans for significant fleet expansion by 2026 and expects to add 63 next-generation aircraft by the end of that year (Key Developments).
- By 2028, Lufthansa's long-haul fleet will include 41 Boeing 787s, 16 Boeing 777-9s, 44 Airbus 350-900s, and 12 Airbus 350-1000s (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has decreased slightly, moving from €7.65 to €7.57.
- Discount Rate has risen modestly, increasing from 9.21% to 9.52%.
- Revenue Growth forecast has edged up from 3.87% to 3.90%.
- Net Profit Margin projection has ticked down a bit from 4.24% to 4.17%.
- Future P/E ratio estimate has increased slightly from 6.53x to 6.61x.
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.