Stifel cuts Lufthansa to 'sell' on yields pressure, higher costs, inefficient capacity growth
** Stifel cuts the German carrier Lufthansa LHAG.DE to "sell" from "hold", citing yields pressure, higher costs and inefficient capacity growth
** The company last week slashed its 2024 earnings guidance for a second time and issued a profit warning for its second quarter
** Brokerage says the outlook cut reflects "an underlying, profound trading/pricing weakness, which does not bode well at all for the all-important summer season"
** Stifel believes Lufthansa's issues are "complex" due to "too much inefficient capacity growth despite yield weakness, combined with perceived product shortcomings and uncompetitive cost structures"
** Due to top-line weakness, Stifel sees yields pressure for 2024 and 2025, as the company continues to pursue growth strategy to recoup 2019 capacity levels
** Brokerage cuts its EBIT forecast for 2024 and 2025 to EUR 1.47 billion ($1.60 billion) and EUR 1.96 billion, respectively, reflecting a 25% downside to consensus for both figures
** The stock was down 3% at 0800 GMT
($1 = 0.9170 euros)
Reporting by Amir Orusov
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