Stifel downgrades its recommendation on Lufthansa from 'hold' to 'sell', with a price target reduced from seven to 4.5 euros, stating that it sees 'severe pressure on consensus estimates for this year and next (around 25%)'.

The broker points out that the earnings warning issued by the German airline last Friday was driven by profound weakness in the second half, rather than by effects limited to the second quarter alone.

Judging Lufthansa's problems to be complex, Stifel points to 'overly inefficient capacity growth despite weak yields, combined with perceived product shortcomings and an uncompetitive cost structure'.

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