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Deutsche Lufthansa Share Price Guide: How To Trade LHA

Date Modified: 29/12/2024

This trading guide will walk you through the essentials of Deutsche Lufthansa stock (LHA) trading, from understanding the factors that influence its stock price to exploring different ways to trade Deutsche Lufthansa's shares with a focus on Contracts For Difference (CFDs).

An image of an airplane flying

TL;DR

  • The Lufthansa Group stands as a prominent player in the global aviation industry, holding the top position among European airline groups.
  • Deutsche Lufthansa's shares have been listed on various German stock exchanges since 1966.
  • Various factors can affect the share price of Deutsche Lufthansa's shares; examples include financial reports, economic cycle, competitive landscape, and industry trends.
  • CFDs can be used by those wanting to get exposure to Deutsche Lufthansa's shares over the short-term.

What Is Deutsche Lufthansa AG?

Deutsche Lufthansa AG, or Lufthansa, is a major player in the aviation industry, offering a wide range of services beyond just transporting passengers and cargo.

At its core, Lufthansa operates a network of passenger airlines, including well-known brands like Lufthansa Airlines, SWISS, Austrian Airlines, Brussels Airlines, and Eurowings. This segment forms the backbone of its passenger transportation services.

In addition to passenger travel, Lufthansa has a strong presence in the logistics industry. Lufthansa Cargo AG, a key part of this segment, provides air freight services.

The Logistics segment also encompasses other subsidiaries like Jettainer, time:matters, Heyworld, CB Customs Broker, and a 50% stake in the cargo airline AeroLogic, demonstrating the company's comprehensive approach to logistics solutions.

Furthermore, Lufthansa Technik stands out as a global leader in maintenance, repair, and overhaul (MRO) services for civilian commercial aircraft. This division, independent of aircraft manufacturers, further diversifies Lufthansa's business and solidifies its position in the aviation industry.

Main Forces that Can Influence Deutsche Lufthansa's Share Price

Here are some factors that could influence Lufthansa's share price, but keep in mind that past performance is not an indication of future results:

  • Earnings: Traders monitor earnings season, as it can provide financial insights into the company's health.
  • Economic Conditions: The overall economic climate, both globally and in key markets for Lufthansa, can significantly affect its performance and share price. Economic downturns or geopolitical tensions can lead to reduced travel demand, impacting Lufthansa's revenue.
  • Competition: The competitive landscape in the airline industry can influence Lufthansa's market share and profitability.
  • Industry Trends: Developments in the aviation and airline industry, such as changes in fuel prices, air travel demand, and technological advancements, can impact Lufthansa's share price.
  • Market Sentiment: Overall market sentiment can sway Lufthansa's stock price, even in the absence of company-specific news.

Deutsche Lufthansa (LHA) Stock Price History

Deutsche Lufthansa's stock price has experienced significant fluctuations since 1987. From 1987 to 2000, it enjoyed a strong bullish trend, gaining approximately 336%. However, this was followed by a two-year market crash, resulting in a loss of over 67% of its value. The stock then rebounded between 2003 and 2006, gaining about 137%, only to lose around 56% between 2007 and 2011.

Another period of growth occurred between 2012 and 2017, with the share price increasing by 234%, despite some volatile years. 2017 marked the company's best year to date, with a remarkable 150% stock price increase. However, between 2018 and 2021, the share price fell by 71% over four consecutive negative years.

As of September 2024, Deutsche Lufthansa's stock price is hovering around the low levels seen in 2021-2022.

Past performance is not necessarily indicative of future results.

Potential Advantages and Risks of Trading Deutsche Lufthansa's Shares

Here are some reasons that might drive traders to engage with Deutsche Lufthansa share trading:

  • Strong Brand Reputation: Recognised for high-quality service, reliability, and operational excellence.
  • Large Global Network: Wide reach through the Star Alliance and its airline group, connecting major cities and providing diverse route options.
  • Modern and Efficient Fleet: Continuous investment in fuel-efficient and environmentally friendly aircraft.
  • Strategic Hubs: Major hubs in Frankfurt and Munich facilitate efficient connections and act as vital gateways.
  • Strong Cargo Division: Lufthansa Cargo is a key player in air freight, offering a reliable revenue stream.
  • Diversified Revenue Streams: Activities beyond passenger and cargo transport, like Maintenance, Repair, and Overhaul (MRO), catering, and IT services, enhance financial stability.
  • Focus on Innovation: Investment in digital technologies to improve customer experience, operational efficiency, and explore new revenue streams.
  • Expansion in Emerging Markets: Potential for growth in regions with increasing air travel demand.
  • E-commerce Boom: Growing e-commerce and global trade present opportunities for Lufthansa Cargo expansion.

Here are some potential risks that traders should consider before engaging with Deutsche Lufthansa share trading:

  • Sensitivity to Economic Changes: Economic downturns can severely impact airline demand, particularly for business travel and cargo.
  • Fuel Price: Fluctuations in oil prices can significantly affect Lufthansa's profitability due to its high dependance on fuel for its business.
  • Intense Competition: The rise of low-cost carriers has increased competition, particularly in the short-haul market with companies like Vueling Airlines, Ryanair or EasyJet (EZJ-L), pressuring fares and profitability.
  • High Operating Costs: Lufthansa's premium service model and hubs in expensive locations can result in higher operating costs than some of its rivals.
  • Operational Complexity: Lufthansa's complex structure, with its numerous subsidiaries and business units, can hinder efforts to achieve operational efficiency and streamline processes.
  • Geopolitical and Other Risks: Lufthansa's extensive global operations expose it to a range of challenges, including geopolitical risks, currency fluctuations, varying labour regulations, and regulatory changes in different countries.
  • Environmental Concerns: The aviation industry's environmental impact is under increasing scrutiny, forcing Lufthansa to adapt to tighter regulations and consumer demand for greener travel. Shifting passenger preferences toward sustainable options could disrupt Lufthansa's traditional business model.

3 Ways to Trade Deutsche Lufthansa Stock

Wanting to get exposure to Deutsche Lufthansa isn't a one-size-fits-all game. The choice between investing vs trading, or leveraging financial derivatives can alter your trading strategy and risk tolerance.

Let's explore three distinct approaches to trade Deutsche Lufthansa's shares:

  1. CFDs on Deutsche Lufthansa

    1. Definition: CFDs on Deutsche Lufthansa allow you to use speculative trading on the airline's share price without actually owning the shares or being a shareholder. When trading shares with CFDs, you can also use long and short positions to trade various market conditions over the short-term.
    2. Advantages: In contrast to traditional stock trading, CFDs allow traders to trade both rising and falling markets, potentially offering a wider range of trading opportunities. It is also a derivative used by short-term active traders that want to capture small price changes over the (very) short-term.
    3. Risks: CFDs are leveraged products, meaning you can control a large position with a relatively small deposit (margin). While leverage can amplify your profits, it can also magnify your losses. This means that even a small unfavourable market movement can potentially lead to substantial losses. Additionally, markets can sometimes be volatile, which means that prices can change rapidly. This market volatility can increase the risk of losses, especially for leveraged CFD positions.
  2. Deutsche Lufthansa Stocks

    1. Definition: Buying Deutsche Lufthansa stocks means you're purchasing a share of ownership in the company, with the potential for profit if the company's value increases. You do so because you believe in the long-term growth potential of the airline company.
    2. Advantages: Because you focus on long-term capital appreciation, you do not need to navigate volatile markets or short-term corrections. You also have the opportunity to achieve potentially larger profits over time if you accurately predict the dominant market trend, while also minimising the amount of time you dedicate to overseeing your trades.
    3. Risks: If a market downturn forces you to sell your Deutsche Lufthansa shares at an inopportune time, you could face substantial losses. Navigating such situations also requires patience and discipline.
  3. ETFs including Deutsche Lufthansa

    1. Definition: ETFs, or Exchange-Traded Funds, offer traders a diversified way to gain exposure to a basket of stocks or assets, including airlines companies like Deutsche Lufthansa, through a single tradable security. It is also possible to trade CFDs on ETFs through CFD providers like Plus500 which offers different types of ETFs.
    2. Advantages: ETFs that include Deutsche Lufthansa offer traders a convenient way to gain exposure to the airline industry and diversify their portfolio without having to buy individual stocks. Additionally, ETFs are traded on exchanges, providing investors with the ability to buy and sell shares of ETFs throughout the trading day at market prices, offering greater liquidity compared to some other investment vehicles.
    3. Risks: ETFs carry risks such as market fluctuations, tracking errors, and potential counterparty or issuer risks.

    How to Trade Deutsche Lufthansa Share CFDs on Plus500 (Step-by-Step)

    1. Learn about CFD share trading basics.
    2. Understand what risk management is.
    3. Decide which method to use to analyse Deutsche Lufthansa's shares (technical analysis, fundamental analysis, sentiment analysis).
    4. Choose your trading style (day trading, swing trading, position trading)
    5. Select your time frame.
    6. Create your trading plan.
    7. Be aware of the common trading mistakes.
    8. Work on your trading mindset.
    9. Create and fund your Plus500 trading account.
    10. Open your CFD trades on Deutsche Lufthansa's shares and monitor your positions.

    Conclusion

    Deutsche Lufthansa AG is a major actor of the aviation industry that can present an attractive opportunity for traders looking to gain exposure to the travel and logistics sectors.

    Ready to start trading Deutsche Lufthansa's stock? Open a CFD trading account on Plus500 to trade CFDs on Deutsche Lufthansa.

FAQs

There are different share trading strategies that you can use when trading CFDs on Lufthansa shares, such as trading economic data, trading ranges, trading breakouts, trend trading, and trading support and resistance levels.

To better manage your risks when trading CFDs on Deutsche Lufthansa on Plus500, you can use various risk management tools such as 'Close at Profit' [Stop Limit] or 'Close at Loss' [Stop loss], Guaranteed Stop, Trailing Stop, as well as Trading Alerts.

Deutsche Lufthansa's shares are traded on XETRA, the electronic German stock exchange located in Frankfurt. XETRA trading hours are Monday to Friday, 9:00 AM to 5:30 PM CET. Please note that trading hours for Deutsche Lufthansa CFDs on Plus500 may differ.

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