5 big analyst AI moves: Apple lifted to Buy, AI chip bets reassessed
Investing.com -- Shares of Deutsche Lufthansa AG fell over 6% on Tuesday following news of a potential strike by German pilots, even as the airline presented medium-term targets at its Capital Markets Day (CMD) on Monday.
The CMD outlined a plan to increase the group’s EBIT margin from 4% in 2024 to a target range of 8-10% in 2028-2030.
Lufthansa’s plan, presented in detail to investors, rests on several key elements. The largest driver is fleet renewal and product premiumisation, supported by group-wide centralisation projects covering pricing, revenue management, and network planning.
Efficiency improvements at the airline, particularly at Lufthansa, also form a major component, including better operational performance, increased crew utilisation, and a planned 20% cut in administrative staff.
Automation of handling processes is expected to contribute to efficiency gains. Smaller contributions to profitability are expected from long-haul volume growth, the consolidation of ITA, and expansion in MRO and cargo.
Analysts at Barclays noted the appeal of network coordination, fleet renewal, and MRO growth. Long-haul expansion and reduced exposure to short-haul connections are seen as logical steps, alongside efforts to grow short-haul leisure through Eurowings.
Fleet and product upgrades are expected to improve unit revenues and lower unit costs, with Lufthansa projecting EBIT growth towards €1 billion by 2030, supported by expansion in Canada, Portugal, and the Philippines, as well as new defence contracts.
However, the CMD also raised questions. Analysts expressed scepticism about the cargo business and ITA, citing structural challenges and competitive pressures. Labour relations at Lufthansa mainline remain strained, with ongoing negotiations over outsourcing and productivity.
Analysts flagged that the planned free cash flow of €2.5 billion relies heavily on asset sales and leasebacks, including increasing leased aircraft from 12% to about a third by 2030, rather than purely on operational performance.
Near-term pressures include the possibility of strikes by the German pilot union VC, which could affect fourth-quarter unit revenues.
Weakness in economy class on North Atlantic routes and competition from Condor, which increased overlap in domestic and short-haul international markets in summer 2025, also represent potential headwinds.
In addition, upcoming renegotiations of handling contracts at Frankfurt airport in 2026 may lead to higher costs, with automation only partially mitigating the impact.
Despite presenting a structured plan for medium-term profitability, analysts maintained an “equal weight” rating and a price target of €7.50, citing uncertainties around labour restructuring, ITA and cargo performance, and the pace of aircraft deliveries.