Friday, January 28

Good signs for tourism continue: Citi improves Lufthansa’s score

The global tourism sector relies on 2022 to achieve, at least, a partial recovery regarding its pre-pandemic levels, and in recent weeks it is receiving good signals in that regard.

The latest good news for the industry has come from Germany, where the airline Lufthansa have seen how Citi changed his recommendation on the shares of the company. If you previously believed that investors should sell their securities, now you advocate buying them.

The US investment bank, which has maintained a mostly bearish trend around airlines during the pandemic, has raised the target price of the shares of the German airline to 7.50 euros.

The recovered optimism of Citi about Lufthansa It has caused the airline to revalue up to 6.5 percent during the first hours of the first day of the stock market in Europe in 2022, climbing to a price of 6.58 euros at the halfway point of Monday’s session.

Analyst consensus remains cautious on Lufthansa

If the renewed ones are fulfilled Citi forecasts for Lufthansa 12 months ahead, the company’s securities would revalue up to 18.6 percent in the entire year 2022.

The US bank’s forecast for the airline, however, is one of the most optimistic at the moment, trusting that the airline’s long-haul flights will benefit from the reopening of Asia to business trips.

In the last month, another financial institution that has opted to change the rating given to Lufthansa has been BNP Paribas, which went from a sell recommendation to a neutral position in which it assigned a new target price to its shares, 7 euros.

These upward trends, however, have not yet permeated the entire consensus of analysts, which for the moment maintains a target price of 6.48 euros for one year, lower than the maximum price that the airline has held during Monday’s session. , thanks to the rebound caused by the recommendation of Citi.

A gradual sum of support

The good news for Lufthansa received from the analysis division of Citi they arrive a month after a move in the same direction by Standard & Poor’s, which changed the airline’s outlook from negative to stable, while consolidating its credit rating at BB-.

According to the report issued by S&P, the positive signs of Lufthansa they emerge from the fact that, despite the delay in the recovery of traffic in 2021, the company “stabilized its liquidity through proactive treasury management and external financing.”

In 2022, in addition, the demand for passenger air traffic “should recover to 70 percent of the level prior to the pandemic,” he considers S&P, which adds that, together with cost reduction measures, the company should improve the adjusted ebitda to 2,000 or 2,500 million euros.

European airlines start the year well

Bounce off Lufthansa On the stock market during the first day of the year 2022, it comes after a close of 2021 in which almost 9 percent was left in its price.

Optimism regarding the airlines, however, is not limited to the German operator, but other companies such as IAG from Air France They have also led their national parks on Monday, January 3, with improvements of 5 and 4.8 percent, respectively.

In this sense, there have been several analysis reports predicting an improvement in the sector in 2022, a context that would lead, for example, to a profit of 240 million euros for IAG in 2022.

Forecasts for Lufthansa, meanwhile, point to a revenue generation of 26,653 million euros in 2022, which would mean a year-on-year growth of 61.9 percent compared to the 16,459 expected for 2021, in addition to an increasingly closer approach to the 36,424 million euros collected in 2019.

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