FRANKFURT – Deutsche Lufthansa AG shares took a significant tumble on Tuesday, dropping more than 4% as major investment banks expressed skepticism over the airline’s recently announced mid-term financial goals. The decline all but erased gains made following the company’s capital markets day.
Lufthansa stock fell 4.15% by 0920 GMT, making it the top laggard on Germany’s mid-cap MDAX index and heading for its steepest single-day drop since April. Despite the sharp reversal, the stock remains up more than 20% year-to-date.
The sharp sell-off follows critical notes from several influential brokers:
- JPMorgan labeled the airline’s targets as “ambitious,” warning that execution risks could lead to one or two “transition years” with limited free cash flow. The bank maintained an “underweight” rating, stating, “We are underweight Lufthansa and are yet to be convinced on the equity story and airline turnaround.”
- Deutsche Bank and Kepler Cheuvreux also sounded a cautious tone, pointing to structural challenges within the company and a perceived lack of “transformational change” in its strategy.
Adding to investor caution is the looming threat of a pilot strike, which represents an immediate operational and financial risk for the German carrier.
The market reaction underscores a prevailing concern among investors that the path to achieving Lufthansa’s multi-year profitability and efficiency targets remains challenging, despite the company’s commitment to a turnaround program.
