Lufthansa Balances TAP Expansion Against Fuel Headwinds as Analysts Turn More Constructive

Published on 11/07/2026 at 17:41 | Editorial boerse-global.de

Lufthansa signed a deal for an initial 44.9% of TAP for EUR 1.02 billion, pending EU approval, as Q3 adjusted EBIT rose 6% to EUR 1.407 billion.

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Lufthansa has moved on two fronts at once: signing a long-awaited deal to take a minority stake in Portugal's flag carrier while reporting higher quarterly earnings that came in despite a hefty rise in fuel spending. The market liked what it saw — the shares climbed 3.9% yesterday, outpacing a weak broader market.

TAP deal signed, but Brussels holds the key

On Tuesday the German group inked a contract with the Portuguese government to acquire an initial 44.9% of TAP Air Portugal. The purchase price is EUR 1.02 billion, though the total could reach as high as EUR 1.2 billion once a potential increase in the holding and a time-dependent additional fee are factored in.

Completion is conditional on regulatory clearances, most notably approval from the European Commission. Until that nod arrives, the transaction remains a minority investment on paper only.

Barclays upgrades as fuel outlook brightens

The upgrade cycle gave the stock an extra push. Barclays lifted its rating from "Underweight" to "Equal Weight" yesterday and raised its price target from EUR 7.50 to EUR 8.40. The broker pointed to falling fuel costs in the wake of the US midterm elections as a tailwind for the European aviation sector, according to dpa-AFX.

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JPMorgan followed on Wednesday with a more modest revision, taking its target from EUR 7 to EUR 7.50 while keeping a "Neutral" rating on the stock.

Third-quarter figures beat expectations

The operating numbers themselves drew scrutiny. Adjusted EBIT for the third quarter of 2026 rose 6% year on year to EUR 1.407 billion, a result that topped expectations. Revenue advanced 9% to EUR 12.2 billion.

Fuel costs, however, ran EUR 543 million above the prior-year level. Management credited strong demand and cost discipline with more than offsetting that burden. Bernstein analyst Alex Irving highlighted the beat but also flagged the higher fuel bill and the ambitious revenue-per-seat-kilometer improvement needed in the final quarter to hit the full-year goal.

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For the whole of 2026, Lufthansa narrowed its adjusted EBIT guidance to a range of EUR 1.7 billion to EUR 2.0 billion. The group expects its total fuel bill to reach EUR 9.3 billion.