LHA GR

Deutsche Lufthansa AG

Industrial/Transportation


Presented:03/28/2016
Price:€14.02
Cap:$7.25B
Current Price:€6.68
Cap:$8.92B

Presented

Date03/28/2016
Price€14.02
Market Cap$7.25B
Ent Value$10.86B
P/E Ratio4.9x
Book Value€12.42
Div Yield3.57%
Shares O/S464.54M
Ave Daily Vol4,811,411
Short IntN/A

Current

Price€6.68
Market Cap$8.92B
Deutsche Lufthansa AG provides passenger, freight and cargo airline services. It operates through the following business segments: Passenger Airline Group, Logistics, Maintenance, Repair, Overhaul, Catering, Information Technology Services, and Others. The Passenger Airline Group segment offers passenger services. The Logistics segment provides a range of freight transport services for various cargos, including live animals, valuable cargo, mail, dangerous goods, and temperature-sensitive goods; and road feeder services. The Maintenance, Repair, Overhaul segment focuses on maintenance, repair, overhaul, modification and conversion, and engines and components for passenger aircraft. The Catering segment provides airline catering, and related upstream and downstream in-flight services; in-flight equipment and logistics services; management of onboard service; and in-flight retail. The company was founded on January 6, 1926 and is headquartered in Cologne, Germany.

Publicly traded companies mentioned herein: Air Berlin PLC (AB1 GR), Air France-KLM (AF FP), Airbus Group SE (AIR FP), Delta Air Lines Inc (DAL), Deutsche Lufthansa AG (LHA GR), easyJet PLC (EZJ LN), International Consolidated Airlines Group SA (IAG LN), Norwegian Air Shuttle ASA (NAS NO), Ryanair Holdings PLC (RYA LN)

Highlights

The presenter is short shares of Deutsche Lufthansa at ~14 euros/ share and sees downside risk to ~8 based on a number of headwinds including both company specific and German market idiosyncrasies. With an inefficient cost structure and aging fleet, Middle Eastern carriers taking share of transfer traffic, and increasing competition in the German market, the outlook for Lufthansa over the next 12 to 24 months is relatively grim. He sees the potential for Lufthansa to earn just 1 euro per share in FY 2017, versus the Street at 3 euros.

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