Mask off: Lufthansa Bonus Certificates: Pros, Cons, and Everything in Between
Lufthansa faces a 18% likelihood of ...
Take a rollercoaster ride with Lufthansa's bonus certificates, stock market's crazy game, and the potential to maximize your gains or lose your shirt!
If you're done playing it safe and searching for the next big investment opportunity, boy, do we have a deal for you! Or should we say, a certificate? Lufthansa bonus certificates with a cap could be your golden ticket to high yields! But beware, these ticket stubs have their own set of rules, rewards, and risks.
Let's dive in!
Lufthansa's Crowd-Pleaser
Lufthansa shares saw a rough patch in the wake of global stock decline this year, plunging from a 12-month high of 8.16 euros in March to a modest recover of 6.33 euros in April [1]. But don't count this aviation giant out just yet!
UBS experts still see hope, with a lowered target price of 8.85 euros and a buy recommendation in tow, even though the first quarter met expectations and the second quarter demand looks solid [1].
The Bonus Certificate: More Than Meets the Eye
Investors who believe Lufthansa shares won't tumble below 5 euros or will only do so modestly due to uncertainties around US trade policies might find these certificates enticing. Bonus certificates with caps offer excellent yield opportunities not just during price advancements but also during sideways movements or significant declines.
However, there comes a catch – investors forgo unlimited profit potential and dividend payments as a countermeasure for the attractive sideways opportunities presented by these certificates [1].
How It Adds Up
If Lufthansa shares never slump below the 4.50 euros barrier by the certificate's valuation date, June 25, 2026, investors will be gifted a bonus payment of 8.50 euros for the certificate.
Key Data to Note
The BNP Paribas bonus certificate on Lufthansa shares (ISIN: DE000PG6H9X9) boasts a bonus level and cap of 8.50 euros, with the cap setting the maximum certificate payout [1]. The barrier remains active until the valuation date. As of writing, investors can buy the certificate for 7.18 euros [1].
The Odds Are (Somewhat) in Your Favor
Thanks to the current purchase price of 7.18 euros, combined with the likelihood of the share never falling below 28.91% (or 2.86 euros) to 4.50 euros by the valuation date, investors could reap a cool 18.38% gross return (about 17% annually) by June 2026 [1].
So, What Could Go Wrong?
Well, plenty! If Lufthansa's share price slips below the barrier at 4.50 euros, the certificate gets redeemed at the closing share price on the valuation date. If this amount is less than the purchase price, investors will bear a loss [1].
Before embarking on this thrilling but risky investment journey, remember the fine print and carefully weigh the potential benefits against the risks. Take into account market volatility, industry challenges, Lufthansa's outlook, and the issuer's creditworthiness [2].
With this knowledge under your belt, you're ready to put on your investor hat, channel your inner stock market maverick, and roll the dice on Lufthansa bonus certificates – just don't forget to roll with the punches!
Disclaimer: This article is not a recommendation to buy or sell Lufthansa shares or investment products on Lufthansa shares. No liability is assumed for the accuracy of the data.
Sources:[1] ntv.de – Walter Kozubek – Zertifikate-Report[2] IBISWorld – Lufthansa Industry Analysis and Research; Statista – Lufthansa Market Outlook
Tags: #Investment #Dax #StockTips #StockAnalysis #Lufthansa #Wealth #Securities
Insights:- Bonus certificates present both potential risks and returns.- Bonus certificates with a cap limit upside potential and offer a degree of protection against losses.- Lufthansa faces industry challenges, including geopolitical tensions, fuel price volatility, and operational disruptions.- The success of bonus certificates is heavily dependent on market conditions.- Investors may face credit risk due to the issuer's creditworthiness.- These certificates are sensitive to the timing of market events.
- The community policy may need to address the risks associated with investing in Lufthansa bonus certificates, given their potential for high yields and limited upside potential.
- In the finance section of the employment policy, there might be a discussion about the benefits and drawbacks of investing in Lufthansa shares or bonus certificates for employee Stock-Market based investment plans.
- The yield of Lufthansa bonus certificates could significantly impact the company's financial health by 2025, as they offer attractive returns during sideways movements or declines but forgo unlimited profit potential and dividend payments.
- Given the volatility of the stock market, the employment policy may consider offering financial education resources to help employees make informed decisions about investing in Lufthansa shares or bonus certificates.
