Lufthansa stock: Will the paper take off at some point?

Last Updated: 8. März 2024By

Lufthansa stock has not performed well since the presentation of its business figures and is trading just below the 7 euro mark. This means that the stock has lost around 14 percent since the beginning of the year and is overall not moving (as of March 8, 2024, at approximately 10 am).

On one hand, the numbers for 2023 were very convincing and Lufthansa will once again pay a dividend for 2023. On the other hand, the current strikes are weighing on the company and the outlook for the current year is mixed. What could be in store for Lufthansa stock?

Lufthansa with a jump in profits in 2023 In the past fiscal year, Lufthansa achieved approximately 35.4 billion euros in revenue, an increase of about 15 percent compared to the previous year. However, the results were even better: Adjusted EBIT rose by 76 percent to around 2.7 billion euros, and the bottom line was a profit of almost 1.7 billion euros, twice as much as in 2022.

For the current year, Lufthansa CEO Carsten Spohr is expecting a significant increase in revenue. However, adjusted EBIT is only expected to be at the level of 2023. In other words, this means a decrease in margin – most recently, the EBIT margin rose strongly to 7.6 percent.

Positive for investors: Thanks to the solid profits in 2023, Lufthansa is now planning to pay a dividend for the first time since the pandemic. 0.30 euros per share will be distributed, which corresponds to a dividend yield of around 4.3 percent at the current price.

Lufthansa stock: Waiting for a breakthrough While not all analysts are optimistic, many see Lufthansa stock as undervalued. Two recent examples: JPMorgan and UBS both confirmed their price targets of 6.90 euros and 15 euros, respectively.

In 2023, the company was able to significantly increase its profits and the outlook is quite solid. However, this is still not reflected in the stock price. Instead, problems such as the current strikes are constantly in focus. The fact that Lufthansa stock recently missed out on being added to the DAX is fitting.

Overall, Lufthansa stock has a lot of catching up to do, and it is quite possible that the crane will take off on the price board. However, the timing is uncertain, and investors will have to continue waiting for a real turnaround.