Evaluating Lufthansa (XTRA:LHA) After Kepler Cheuvreux’s Buy Upgrade and Turnaround Optimism

Deutsche Lufthansa (XTRA:LHA) jumped after Kepler Cheuvreux raised its rating to Buy, highlighting a turnaround plan that is mostly scheduled for execution next year along with improving conditions in long-haul travel.

See our latest analysis for Deutsche Lufthansa.

The rating upgrade lands on top of already strong momentum, with a 37.48% year to date share price return and a 33.38% one year total shareholder return suggesting confidence in Lufthansa’s multi year recovery story.

If this rebound in air travel has your attention, it could be a good moment to explore other aerospace and defense stocks that might benefit from similar structural tailwinds.

Yet even after a 37% year to date surge, valuation signals such as a large intrinsic discount hint at further upside and raise the question: is Lufthansa still a buy, or is future growth already fully priced in?

Most Popular Narrative: 7.2% Overvalued

Deutsche Lufthansa's widely followed narrative points to a fair value slightly below the last close, framing the current rally as already pricing in much of the recovery.

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.

Read the complete narrative.

Curious how modest growth, shifting margins, and a lower risk premium can still justify a premium earnings multiple for a legacy airline? Unpack the full narrative to see which forecast levers really carry this valuation.

Result: Fair Value of $7.89 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if fleet modernization and the turnaround plan deliver faster margin gains, Lufthansa’s earnings power could surprise consensus and challenge the overvaluation view.

Find out about the key risks to this Deutsche Lufthansa narrative.

Another View: Multiples Paint a Cheaper Picture

While the narrative suggests Lufthansa is 7.2% overvalued on fair value, its 6.2x price to earnings looks strikingly low against the 9.3x global airlines average, 12x peer average, and a 12.7x fair ratio, which may hint at upside potential if sentiment and earnings remain supportive.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Deutsche Lufthansa Narrative

If your perspective differs or you prefer to dig into the numbers yourself, you can build a tailored story for Lufthansa in minutes using Do it your way.

A great starting point for your Deutsche Lufthansa research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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