Lufthansa returns to blue chips? The company's shares have added 10% since the beginning of the year
Lufthansa securities dropped out of Germany's main stock index, the DAX, almost six years ago amid the onset of the pandemic, but are now close to a comeback, Deutsche Bank analysts say
Lufthansa securities may return to the main stock index of Germany, analysts noticed / Photo: alexanderon / Shutterstock
German airline group Lufthansa is close to returning to the main stock index of Germany - DAX (Deutscher Aktienindex), analysts of Deutsche Bank led by strategist Caroline Raab, writes Bloomberg. The company's securities dropped out of this index almost six years ago, after they collapsed on the background of the beginning of the COVID-19 pandemic. Now, analysts noted, Lufthansa shares have grown significantly, which brings the airline closer to returning to the German blue chip index.
In trading on February 13, Lufthansa securities add another almost 2%,
Details
The quarterly revision of the DAX indices by Europe's leading index provider, STOXX, is set to take place on March 4.To return to the main German stock index, which consists of shares of the 40 largest companies on the Frankfurt Stock Exchange, Lufthansa must be in the 33rd (or higher) position in the market capitalization ranking of German companies whose shares are in free-float (free-float), Bloomberg points out, noting, however, that this may not be easy.
Despite growth in recent months, Lufthansa securities fell this week amid flight cancelations and a strike by pilots and flight attendants (their grievances are related to social guarantees and low, as they claim, pension payments, which Lufthansa management cannot satisfy - due to lack of financial capacity, the company said earlier). "Lufthansa's inclusion in the DAX index is now in question, so the coming days will be crucial," Deutsche Bank analysts pointed out in a note. Thus, a small gain in the value of the company's shares on Friday, February 13, again increased the chances of Lufthansa to return to the index, notes Bloomberg.
Replacing Lufthansa in the DAX, according to Deutsche Bank estimates, could be retailer Zalando, whose shares have lost more than 19% in the last month amid investor concerns about its competition with TikTok Shop.
Context
Lufthansa shares, in turn, rose by 36.49% last year. Since the beginning of the year they have added almost 10% more. Of the 18 analysts who watch the company's securities, most - 9 - recommend keeping them in their portfolios; seven advise buying, and two recommend reducing the position, or sell (one Underperform and one Sell rating each), according to Marketscreener data. Analysts' average target for the company's securities (€8.8 apiece) suggests a slight decline relative to their closing level on February 12 (€9).
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