- German DE30 extends narrow consolidation
- JP Morgan revises its company recommendations
- JOLTS/ ISM PMI data in focus for investors
Overall market situation:
Tuesday's session on the German stock market brings another day of suppression. The German DE30 remains in the 16,450-point zone, with no excessive deviations. A review of PMI data for services showed slightly better sentiment in this sector of the German economy. Slightly larger market movements may occur today with the start of the session on Wall Street and the publication of JOLTS/ISM PMI data for services from the US.
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European companies during Tuesday's trading session are trading at mixed levels at the moment and cannot find a common direction. Source: xStation 5
DE30 cannot find direction during Tuesday's trading session. The instrument is still holding in the 16,450-point zone. The main level of potential resistance may now be the zone of high in the area of 16,600 points, and support the zone of 16,000 points. Source: xStation 5
News:
Chemical company Brenntag (BNR.DE) intends to continue splitting its two divisions Essentials and Specialties are to be established as two independent units. Brenntag has also set new financial targets through 2027.
On an annualized basis, the company expects organic earnings growth of 4% to 7% and EBITA growth of 7% to 9% over the forecast period
However, the company's shares are losing nearly 1.8% in today's session. Jefferies analysts announced that the actual closing of the company's restructuring could take place only in 2026, which could be a relatively long time for many investors. JP Morgan analysts maintained a "sell" rating on the company's shares (the bank's target price at €72). The bank mainly pointed to the costs of separating divisions and the cost-cutting program, which were much higher than expected.
Source: xStation
Today's session brings a general revision of JP Morgan's recommendations. Its analysts reiterated an "underweight" recommendation with a target price of €52 for Carl Zeiss Meditec (AFX.DE) shares, citing a slowing earnings profile and "unattractive" valuation. JPM also sees a rising cost base as a major challenge to the company's margins, as the company faces volume and pricing adversity in China (25% of group sales). Despite the stock's 30% decline since the beginning of the year, it still trades at a 35% premium to the sector, JP Morgan analysts added. The company's shares are currently losing 3.35%.
JPMorgan analysts singled out Morphosys (MOR.DE) as a favorite among small companies in their 2024 forecast for the pharmaceutical sector. JPM rates Morphosys shares at "overweight" with a target price of €31. The company's shares are currently gaining more than 7%.
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