The Lufthansa share has been rising sharply for two months. With Bonus Certificates with a cap, investors can also generate high returns when the upward movement is replaced by a sideways movement or a consolidation.
Since October 3, 2022, when it was quoted at EUR 5.52, the Lufthansa share has risen rapidly by 46 per cent to its current level of EUR 8.07. Average yields in the passenger business, which were above the pre-crisis level and the record results of Lufthansa Cargo and Lufthansa Technik and the increase in the forecast for the year as a whole, caused the share price to rise most recently.
Due to the repayment of state aid and the withdrawal of federal influence from the company, experts from JP Morgan Chase reiterated their buy recommendation for the Lufthansa share with a target price of EUR 9.80.
The investment idea
After the publication of the good news and positive prospects, the Lufthansa share could continue its current upward trend. Investors who want to significantly reduce the risk of buying shares directly and still want to achieve returns above the high inflation rate could consider investing in a bonus certificate with a cap.
Apart from dividend payments, private investors can only achieve positive returns when buying a share directly if the price rises. Compared to direct share purchases, bonus certificates with and without a cap offer investors opportunities for annual returns in the double-digit percentage range not only when the share price rises, but also when the price stagnates or falls.
The way it works
If the Lufthansa share never touches or falls below the barrier of 19 euros by the valuation date of the certificate, then the bonus certificate will be repaid on December 22, 2023 with the bonus level of 40 euros.
The key data
The HSBC bonus certificate with a cap (ISIN: DE000HG75EP9) on the Lufthansa share has a bonus level and a cap of EUR 9.30. The cap defines the maximum repayment amount of the certificate. The barrier activated until the valuation date, December 15, 2023, is EUR 5.25. With the Lufthansa share price of EUR 8.07, investors were able to buy the certificate for EUR 8.06.
The chance
Since the certificate is currently priced at EUR 8.06, it enables a gross return of 15.38 percent in twelve months if the share price never falls by 34.94 percent to EUR 5.25 or below by the valuation date.
The Risks
If the Lufthansa share loses more than a third of its value by the valuation date and touches the barrier at EUR 5.25 and the share is listed below the cap on the valuation date, investors will receive one Lufthansa share in their custody account for each certificate. If this share is sold below the purchase price of the certificate, i.e. below EUR 8.06, then the certificate investment will cause a capital loss.
This article does not constitute a recommendation to buy or sell Lufthansa shares or investment products based on Lufthansa shares. No liability is assumed for the correctness of the data.
