Lufthansa Group: Earnings Upside Ahead

2025-03-10 01:54:25 ET

Summary

• Deutsche Lufthansa AG was rebranded as "Lufthansa Group" to reflect its transformation from a single airline into a multi-brand aviation group.
• There is positive earnings expectation in 2025 and a reassuring industry outlook should aid the sector.
• Solid balance sheet, MRO upside still in place, ITA integration ahead (with fleet optionality), and an ongoing valuation discount make DLAKY a buy.

Following our update on International Consolidated Airlines, which we believe Will Fly Higher , we are back to comment on Deutsche Lufthansa AG ([[DLAKF]], [[DLAKY]]). The company was rebranded as " Lufthansa Group " to reflect its transformation from one airline into a multi-brand aviation group. We are impressed with the company's recent stock price performance. In detail, since our last update released in January 2025, Encouraging Sign On The MRO Division , the share price has been up by almost 38% (Fig 1) and has reached our 12-month target price, set at €7.8 per share. A deleveraging path story, air flight production capacity constraints, and a new turnaround program backed our initial buy rating . In our last analysis, we also reported 1) solid evidence to the MRO division following a dedicated Investor Day, 2) no additional M&A after the ITA acquisition, and 3) better financial comps on 2024 results combined with a supportive entry valuation....

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