Lufthansa shares at 2-yr high after Kepler upgrades to 'buy'

Shares in Deutsche Lufthansa LHAG.DE jump around 5% to two year-high after Kepler Cheuvreux raised the German flagship carrier to "buy" from "hold"

Kepler says global travel is entering a new paradigm, with demand no longer primarily driven by GDP cycles but by the structural rise of the global affluent travellers

It notes the investor focus shifts to carriers with exposure to premium, international, and long-haul flows

"We believe Lufthansa’s risk/reward is becoming increasingly attractive," it says

It points to Lufthansa's successful turnaround, with 60% of the programme slated for delivery next year, boost from a potential U.S. recovery and the possibility of Russian airspace reopening

Still, it says that challenges remain, such as ongoing union pressure, Middle Eastern competition, a complex group structure and operational risks

"But the upside potential is difficult to ignore," Kepler says

The stock tops Germany's mid-cap .MDAXI index and is among the best performers on the pan-European STOXX 600 .STOXX index