55 percent protection: Lufthansa with a 14 percent chance

The Lufthansa share rose strongly after good quarterly figures and the agreement in the wage dispute with the ground staff.

55 percent protection: Lufthansa with a 14 percent chance

The Lufthansa share rose strongly after good quarterly figures and the agreement in the wage dispute with the ground staff. With bonus certificates with a cap, investors can also achieve high returns if the share comes under pressure again.

The return of the Lufthansa Group to the profit zone was acknowledged by the stock market traders on August 4, 2022 with a jump in the Lufthansa share price of up to seven percent. In the second quarter, the company was able to achieve an operating profit of 393 million euros. In the same quarter last year, Lufthansa had to announce a loss of 827 million euros. The load factor of the flights in the second quarter was 80 percent despite higher prices and thus almost reached the level of 2019, when the load factor was 83 percent.

The investment idea

If the positive company news and the agreement in the collective bargaining dispute overcompensate for the negative headlines, such as numerous flight cancellations and strikes, in the next few months, the share price should definitely still have recovery potential. As an alternative to buying shares directly, investors could consider buying a bonus certificate with a cap on the Lufthansa share, which will yield a double-digit annual gross yield even if the current share price halves. Bonus certificates significantly reduce the risk of buying shares directly and still allow returns in the double-digit percentage range.

Apart from dividend payments, the direct purchase of the Lufthansa share will only enable a positive return if the share price increases. With bonus certificates with and without a cap, investors can achieve disproportionately high returns not only when the share price rises, but also when prices are stagnating or falling.

The way it works

If the Lufthansa share never touches or falls below the barrier of EUR 3.00 by the valuation date of the certificate, then the bonus certificate with cap will be repaid on September 22, 2023 with the maximum repayment amount of EUR 7.20.

The key data

The Société Générale Bonus Certificate with a cap (ISIN: DE000SN38LU5) on the Lufthansa share has a bonus level and a cap of EUR 7.20. The cap defines the maximum payout amount of the certificate. The barrier activated by the valuation date, September 15, 2023, is EUR 3.00. At the Lufthansa share price of EUR 6.63, investors were able to purchase the certificate for EUR 6.33. The certificate is therefore much cheaper to get than the share.

The chance

Since the certificate can currently be bought at 6.33 euros, it enables a gross return of 13.74 percent (equivalent to 12 percent per year) until September 2023 if the share price never falls by 54.75 percent to 3 euros or 3 euros by the valuation date falls below.

The Risks

If the price of the Lufthansa share touches the barrier of EUR 3.00 by the valuation date and the share is listed below the cap on the valuation date, investors will receive one Lufthansa share for each certificate in their custody account. If this share is sold below EUR 6.33, the purchase price of the certificate, then the 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.

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