Deutsche Lufthansa (0H4A – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Tabitha Foo from DBS maintained a Hold rating on the stock and has a €6.00 price target.
Tabitha Foo’s rating is based on a combination of factors that reflect both the opportunities and challenges facing Deutsche Lufthansa. The company has shown strong financial performance with its FY24 adjusted EPS surpassing expectations and operating profit exceeding street estimates. This positive outlook is supported by the growth in EBIT from subsidiaries like SWISS and Austrian Airlines, which helped offset losses from Lufthansa Airline. Moreover, the group’s strategic multi-brand and multi-hub approach provides a competitive edge and resilience in the market.
However, Foo maintains a Hold rating due to several ongoing challenges. Despite robust forward bookings, Lufthansa faces operational hurdles such as unscheduled engine maintenance and delayed aircraft deliveries, which could impact its recovery timeline. Additionally, while cost-saving measures are expected to yield benefits, these will only materialize significantly in FY25. The macroeconomic environment, including geopolitical tensions and inflationary pressures, also poses risks to discretionary travel spending, which could affect Lufthansa’s performance. Consequently, the stock is rated Hold with a target price of EUR6.00, reflecting a cautious stance amidst these mixed signals.
Questions or Comments about the article? Write to editor@tipranks.com