LHA heads into the post-earnings period with an interesting split: the stock just had its best week in months, yet short positioning has barely budged.
Q1 results dropped on May 6 and landed better than expected — at least in relative terms. The group reported a net loss of €665 million through March, but revenue hit €10.24 billion, up sharply from €8.55 billion a year earlier. The headline EPS miss (–$0.64 vs. the –$0.51 estimate) was offset by the top-line strength and management's decision to hold full-year guidance despite flagging an additional €1.7 billion in fuel costs tied to the Iran conflict. The market's immediate verdict: an 8.2% gain on the week, with 3.2% of that coming on Wednesday alone. Separately, Lufthansa confirmed it will make a binding offer for TAP Air Portugal, adding a strategic dimension to the week's news flow.
Short sellers are not rushing for the exits. SI as a percentage of free float has dropped from a recent peak of 5.6% on April 28 to 4.4% now — a genuine retreat, but one that still leaves the short book firmly in place. The unwind has been gradual: shorts began pulling back across the last week of April as the stock recovered, yet they absorbed the Q1 print without any sign of a forced squeeze. The borrow market tells a more volatile story. Cost to borrow spiked to nearly 22% on May 1 — briefly the highest level in the 30-day window by a wide margin — before collapsing to 4.3% by May 5. That spike was likely driven by a short-term tightening around a settlement cycle rather than a structural change in demand. Availability has tightened meaningfully since early April: the lending pool was running near its 52-week maximum utilisation of 30.6% on May 1 before easing back to 28.75%. It is not a squeezed market, but it is a tighter one than it was six weeks ago.
The valuation picture is modest by most measures. At a P/E of 7.1x — up about 0.8 turns over the past 30 days as the stock recovered — and an EV/EBITDA of 3.5x, Lufthansa trades well below most European legacy carrier peers. The price-to-book is 0.74x, reflecting the market's historically cautious view of airline balance sheets. A 4.7% forward yield adds some income support. Factor scores are mixed at best: EPS momentum scores in the 14th percentile over 30 days and the 17th over 90, making clear the earnings revision cycle has been negative. Analyst consensus return potential is thin at 4.35%, and the stale historical price target data (last updated November 2025) cannot be reliably used here. What the Street is watching is whether the full-year cost guidance absorbs the fuel headwind — or whether it gets revised before Q2.
The CFO bought 32,341 shares at €7.75 in early March, and supervisory board member Karl Gernandt added 11,000 shares at €8.10 around the same time. Combined, insider net purchases over the past 90 days total roughly 43,000 shares at an average value just under $395,000. Neither transaction is large relative to the company's float, but the direction is consistent — insiders buying at or above current prices frames the current €7.73 level as one where those with the most information were willing to deploy capital. Kühn Aviation GmbH remains the anchor with 15% of shares. The next tier — Capital Research, BlackRock and Vanguard — have all been adding modestly on recent reports.
The March full-year print is the most useful historical reference. Full-year 2025 results on March 6 triggered a 6.4% single-day fall and the stock went on to shed another 6.3% over the following five days. That reaction was more severe than what the market delivered this week — suggesting either that the Q1 data was better than feared, or that the multiple compression in March already priced in the bad news. Whether the TAP binding offer changes the strategic calculus, and how the Iran fuel-cost line evolves through Q2, are the two threads most worth tracking from here.
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