Finnair vs Lufthansa vs Norwegian – comparing airlines

In my previous posts I did my regular growth numbers analysis. In this post I will compare them. I’m interested in finding the strongest airline company which I can buy through my broker. Finnair, Lufthansa and Norwegian are interesting to me.

The airline stocks have crashed. Warren Buffet solds his awhile back. Will the airline business go back to normal? I believe so. I just don’t know when and which companies will survive.

I believe people are eager to travel again.

Here in Sweden everything seems to be back to ususal. As if the pandemic didn’t affect us. The public transports are stuffed with people. Even more than usual during holiday months. I would estimate that less than 10% wear facemask on public transports. It’s not mandatory here.

Meanwhile the pandemic rages in some parts of the world while the American stock markets have reached new All-time-highs.

Previous posts

Numbers analysis: Finnair Oyj

Numbers analysis: Deutsche Lufthansa AG

Numbers analysis: Norwegian Air Shuttle

Numbers

ROICSalesEPSEquityCash Flow
Finnair3 | 3 | 35 | 8 | 9– | -4 | -301 | 7 | 529 | 35 | 12
Lufthansa9 | 12 | 64 | 3 | 20 | -9 | -442 | 15 | 73 | 4 | -2
Norwegian1 | 1 | 020 | 18 | 8– | – | –10 | 9 | 14216 | 7 | 556

Growth rates (%) for 10 year average | 5 year average | 1 year average
Finnair1145
Lufthansa2642
Norwegian32629
Number of investors who own the stock on Avanza (a smaller bank for mainly retail investors in the Nordic countries)
MCAPPriceFair value rangeMOS rangeDebt (%)
Finnair638 MEUR0.55 EUR0.27 – 30.14 – 1.541
Lufthansa4766 MEUR8.40 EUR3-42 – 224
Norwegian4961 MNOK1.3 NOKn/an/a71
1 NOK = 0.09 EUR

My take

I do expect people to start travel again. If the tide change and air travel somewhat return to “normal” it couble be a good bet to speculate in airlines companies. It is very risky though and the risk of bankruptcy is high.

My take is that Lufthansa seem like the safer bet with a good historic ROIC, positive EPS and 24% debt. It’s near a multiyear support at around 7.5 EUR. However it is not even near it’s fair value. If the pandemic doesn’t get under control and there is panic in the stock markets the stock could go lower.

I bought a minifuture with 3x leverage of Lufthansa for my longterm portfolio. A small (1% of total portfolio) bet. Stop loss just below support. If I stop out I will look to reenter if it reclaims previous support.

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