Lufthansa: Credit Suisse still a seller

(CercleFinance.com) - The analyst believes that Lufthansa's target update focused on the recovery in demand and strong cash inflows from bookings.


Indeed, Lufthansa has unveiled its 2024 guidance of an EBIT margin of at least 8% (Credit Suisse estimates 6%, Consensus: 7.6%) and an adjusted ROCE of at least 10%.

Following these forecasts, Credit Suisse confirms its sell recommendation on the stock with a price target of 4.47 euros - representing huge downside potential.

"It plans an equity raise and asset disposals... LHA looks to raise equity (potentially E3bn-E4bn vs a E6bn mkt cap)," Credit Suisse said.

"An ambition to restore 2017-2018 margins seems a strong message in our view... It will take time for the market to build confidence".

The group will have "to achieve staff cost reductions: this is the most important part of the plan and converting temporary concession agreements into permanent savings" it adds.

The share is currently up over 1.5% at about 10.5 euros in Frankfurt.



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