DAX: DE40 loses 0.6% amid profit-taking in Europe 📉Thyssenkrupp gains 3% extending growth driven by Marine Systems IPO

• European stocks lose today as investors started profit-taking strategies; DE40 loses 0,6%
• BASF shares are down nearly 2% following a downgrade by Berenberg (price target: €52, roughly flat compared to the current market valuation).
• Deutz and CTS Eventim lead gains in Germany, both rising by nearly 5%.
• Rheinmetall and Hensoldt extend their upward momentum despite weaker sentiment, while Thyssenkrupp (TKA.DE) continues to rally on the planned IPO of its Marine Systems naval division.
• Germany’s ZEW economic report sentiment higher than expected

Today, we are witnessing a correction of the recent euphoric gains in the DAX and other European indices. However, investors continue to favor defense sector stocks, particularly Rheinmetall and Germany’s largest steel producer, Thyssenkrupp, which plans to spin off and IPO its Marine Systems unit—a division specializing in submarine construction, servicing, and naval solutions.

The Bundesbank has warned that Germany’s economy is vulnerable to potential U.S. tariffs, shifts in trade policy, and declining export demand. According to the Bundesbank, Germany’s GDP in 2027 could be 1.5% lower than the baseline scenario due to changes in U.S. trade policy. For this year, growth is projected at just 0.2%. Last Friday, Donald Trump announced plans to impose tariffs on imported cars around April 2. Meanwhile, Olaf Scholz’s approval ratings are declining in favor of Friedrich Merz, leader of the CDU/CSU, who promises a more growth-focused economic policy.

Source: xStation5

Strong UniCredit Gains Lift European Banking Sector

Source: xStation5

Company News

Entertainment giant CTS Eventim reported preliminary full-year EBITDA of €542.2 million, a significant increase from €444.8 million the previous year.

• The Ticketing segment saw a 22.7% year-over-year revenue increase, reaching €879.9 million, with adjusted EBITDA at €416 million (+21.1% y/y).
• The Live Entertainment segment posted a 17.6% rise in revenue to €1.97 billion, while adjusted EBITDA surged 24.4% y/y to €125.6 million.

HSBC upgraded Deutz AG from "neutral" to "buy", setting a €6.10 price target, implying an approximately 15% upside from the current price of the industrial engine manufacturer.

Thyssenkrupp AG recorded its largest gain in 4.5 years, driven by the company’s focus on the IPO of its submarine-manufacturing Marine Systems unit.

• Shares jumped 20% on Monday, contributing to a broad rally in European defense stocks.
• The Marine Systems division supplies 70% of NATO’s European submarine fleet.
• Bank of America believes that selling the unit could help Thyssenkrupp attract a wider investor base.
• According to estimates, Marine Systems could be worth around 50% of Thyssenkrupp’s current market cap.
• The valuation could be significantly higher if the market assigns a defense-sector multiple rather than a steel-sector multiple.

Source: xStation5

German ZEW Economic Sentiment: 26 (Forecast 20, Previous 10.3)

• Current conditions: -88,5 vs -89,4 exp. and 90,4 previously

EURUSD gains after as ZEW report showed better than expected sentiments across the German economy, with (only) slightly better current conditions measure.

European Stock Rating Changes

Upgrades:

• Deutz upgraded to "buy" at HSBC; price target €6.10
• Glencore upgraded to "overweight" at Morgan Stanley; price target 470 pence
• St James’s Place upgraded to "hold" at HSBC; price target 1,100 pence
• TietoEVRY upgraded to "buy" at Inderes; price target €22

Downgrades:

• Airtel Africa downgraded to "neutral" at Citi; price target 160 pence
• Assura downgraded to "hold" at Deutsche Bank; price target 48 pence
• Bakkafrost downgraded to "hold" at Kepler Cheuvreux
• BASF downgraded to "hold" at Berenberg; price target €52
• BT downgraded to "sell" at Citi
• Bakkafrost downgraded to "hold" at Arctic Securities; price target 640 kroner
• Direct Line downgraded to "hold" at Peel Hunt; price target 275 pence
• Embracer downgraded to "hold" at Kepler Cheuvreux
• Neste downgraded to "reduce" at Inderes; price target €11.50