Lufthansa: Oddo cuts 2022 and 2023 forecasts

(CercleFinance.com) - The analyst believes that Lufthansa will not be able to offset the entire increase in its fuel bill in 2022, despite its comfortable coverage (63% of needs at $74/bl compared with 51% for Air France-KLM and 60% for IAG).


Based on analysts' assumption of 98.8 dollars per barrel, they model a bill of 5.6 billion euros (+3.2 billion euros compared to 2021). With spot oil prices and the E/$ parity, the bill would increase by an additional 0.6 billion euros, Oddo says.

Following the publication and especially the update of Brent assumptions ($98.8 in 2022, $88.2 in 2023 and $82 in 2024), the broker is slashing its adjusted EBIT estimate from 562 million euros to 156 million euros for 2022 and from 1,587 million euros to 1,263 million euros for 2023.

Oddo confirms its neutral rating on the stock, along with a target price of 7.2 euros, to reflect the balance sheet clean-up steps already taken and the scope for further deleveraging with upcoming disposals.

However, the uncertainty surrounding the Ukrainian conflict (duration, scope of sanctions, volatility of Brent prices, etc.) does not yet enable it to adopt more aggressive assumptions regarding traffic trends, Oddo adds.

The share is down 6% today, twice the fall in the general index in Frankfurt.


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