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Positive outlook: Deutsche Bank upgrades Sixt shares
Sixt shares jump sharply after Deutsche Bank upgrade - analysts praise the car rental company's sales and profit development. Forecast raised to “Buy”. Positive growth expected.
Positive outlook: Deutsche Bank upgrades Sixt shares
Deutsche Bank's research division was optimistic about Sixt's future development. Analyst Michael Kuhn praised the company for its effective management of residual value risks and upgraded the stock from “Hold” to “Buy” in a study. The price target of 120 euros remained unchanged, which would correspond to a potential increase of 28 percent with a price jump of around 8 percent on that day.
On that day, Sixt shares recorded a temporary increase of 8.67 percent to 94.00 euros in XETRA trading. Deutsche Bank revised its previous assessment due to Sixt's positive forecasts for pre-tax earnings in the first quarter and for the full year. The expected return of daily sales per car to the growth range was also viewed positively.
However, a potential risk to the share price could be an escalation in the Middle East, as Kuhn warned. However, Sixt is not directly active in this region and the company's holiday business is largely dependent on short-haul traffic. The clarification of the successor to the head of finance is also positive, with Franz Weinberger replacing Kai Andrejewski on June 1st.
Deutsche Bank's recommendation to buy the stock is based on the expected total return for the next twelve months. The past crisis-resistance of Sixt's profits as well as the positive development in residual value risks and personnel issues have strengthened the analysts' confidence.