Sixt lowers profit forecast for 2024

Sixt lowers profit forecast for 2024

The car rental company Sixt has lowered its profit forecast for 2024. This decision is based on the previously announced losses in the first quarter, the developments in April and the expectations for the coming months. Sixt mainly attributes the reduction to worsening economic prospects, a delayed turnaround in interest rates, falling market prices in some regions and falling residual values ​​with higher vehicle costs.

For the 2024 financial year, Sixt continues to expect strong sales growth compared to the previous year, but group earnings before taxes are now expected to be between 350 and 450 million euros. Previously, the forecast range was between 400 and 520 million euros. In the first quarter of 2024, the company recorded a pre-tax loss of 27.5 million euros on sales of 780.2 million euros, which was at the lower end of the forecast.

Sixt shares slumped to their lowest level since 2020 after annual targets were cut. The common shares fell by 22 percent in the current year to 78.95 euros. The Sixt share temporarily lost 11.11 percent to 80.45 euros. The new annual targets envisage a consolidated profit before taxes of 350 to 450 million euros, compared to the previously targeted 400 to 520 million euros. Despite the reduction in the profit forecast, the board expects an improvement in the second half of the year.

After lowering the annual targets, the analysis house Jefferies continued to rate the Sixt stocks as “Buy” and a price target of 135 euros. The main reasons for the reduction were falling residual values ​​of rental cars, worsening economic prospects and price declines, especially in the USA. The current developments surprised the analyst, as there were no signs of this reduction at the company's analyst day a few weeks ago.