Deutsche Lufthansa (0H4A – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Jaina Mistry from Jefferies maintained a Hold rating on the stock and has a €6.40 price target.
Jaina Mistry’s rating is based on a combination of factors that reflect both positive and negative aspects of Deutsche Lufthansa’s current financial situation. The company’s fiscal year 2024 results showed a strong performance in terms of adjusted EBIT, which exceeded expectations by 4%, largely due to effective cost control measures. However, despite this positive outcome, the guidance for free cash flow in 2025 is approximately 4% below consensus, indicating potential pressure on future earnings and suggesting a neutral to negative impact on the share price.
Additionally, Lufthansa faces challenges related to its aging fleet and low margins compared to its peers. While the delivery of new aircraft could eventually improve margins, the company’s reliance on Boeing introduces uncertainty in this progress. Furthermore, there are ongoing concerns about Lufthansa’s ability to successfully renegotiate labor contracts within its German operations. These factors contribute to the Hold rating, as they present both opportunities and risks that could affect the company’s future performance.
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