Equity valuation of Deutsche Lufthansa AG

• Autor(a) principal: Peter, Florian
• Data de Publicação: 2024
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
• Texto Completo: http://hdl.handle.net/10400.14/46810
• topic: Lufthansa; Passenger airlines; Air freight; Maintenance repair and overhaul (MRO); Equity valuation; Firm valuation; Discounted cash flow; Adjusted present value; Relative valuation; Companhias aéreas de passageiros; Carga aérea; Manutenção; Reparo e revisão (MRO); Avaliação patrimonial; Avaliação da empresa; Fluxo de caixa descontado; Valor presente ajustado; Avaliação relativa

This dissertation provides a commercial, financial, and valuation analysis of Europe’s leading airline group, Deutsche Lufthansa AG. The core of the dissertation focuses on valuing Lufthansa using two intrinsic valuation approaches: the classic DCF method and the APV method, along with a relative valuation approach using trading multiples. The valuation is conducted as of May 31, 2024, yielding a target share price of EUR 9.41, representing a 38.18% premium over Lufthansa’s share price on May 15. This valuation is premised on Lufthansa leveraging its leading market position to continue its recovery following the challenging pandemic years. The analysis concludes that Lufthansa is well-positioned across its three main business segments – passenger airlines, logistics, and MRO – with industry growth projections for all three segments indicating strong revenue potential. The critical challenge for Lufthansa will be maintaining cost control in a highly competitive market environment. This analysis is compared with two equity research reports from Alpha Value and Barclays, which similarly present positive outlooks with target share prices of EUR 8.48 and EUR 9.08, respectively. These reports confirm the overall BUY recommendation derived from this dissertation. The market currently undervalues Lufthansa’s stock, likely due to recent headwinds, including significant strikes in early 2024. However, the positive long-term growth prospects underscore a substantial upside potential for investors.