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Investing.com - JPMorgan has upgraded Deutsche Lufthansa AG (ETR:LHA) (OTC:DLAKY) stock rating from Underweight to Neutral while raising its price target to EUR7.50 from EUR5.30. The upgrade comes as Lufthansa shares have surged 54.7% year-to-date and nearly 48% over the past 12 months, according to InvestingPro data.
The upgrade comes as JPMorgan sees lower risk that Lufthansa will issue profit warnings on its 2025 guidance, citing improving trends in the second half of the year.
The investment bank highlighted improving German economic growth and more favorable government steps toward the aviation industry, including reductions in ticket taxes, as supporting factors for the airline.
JPMorgan noted that Lufthansa Mainline and cost restructuring efforts appear to be benefiting ex-fuel CASK (cost per available seat kilometer) even before any real fleet transformation or productivity benefits have begun.
The firm also pointed to a structural demand tailwind for MRO (maintenance, repair, and operations) activities that should benefit growth at Lufthansa Technik, the airline’s maintenance division.
In other recent news, Deutsche Lufthansa AG has been in the spotlight with several notable developments. Morgan Stanley has initiated coverage on Lufthansa with an Underweight rating, setting a price target of EUR5.40. The investment bank expressed concerns over the airline’s margin challenges following a weaker-than-expected performance in 2024 and the first half of 2025. In response, Lufthansa’s management has unveiled a transformational plan aiming to double margins to 8-10% by fiscal years 2028-2030. Additionally, labor issues have emerged as a significant concern for the company. Lufthansa pilots have voted overwhelmingly in favor of strike action due to a pension dispute. The pilots’ union, Vereinigung Cockpit, reported that a "vast majority" of its members supported the strike, although no specific timeline for the industrial action has been announced. These developments highlight the ongoing challenges faced by Lufthansa as it navigates both financial and labor-related hurdles.
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