Germany stocks higher at close of trade; DAX up 0.39%

Investing.com -- Deutsche Bank upgraded Novartis (SIX:NOVN) to Buy on Tuesday following the Swiss pharmaceutical company’s strong fourth-quarter results and an improved 2025 outlook.

Analysts at Deutsche Bank (ETR:DBKGn) had previously held a cautious stance due to concerns over a potential post-2025 patent cliff but now see a more favorable long-term trajectory.

“2025 ain’t the cliff and there’s still time to build a bridge,” the bank stated, emphasizing the company’s ability to sustain revenue growth beyond the near term.

Novartis’ Q4 results aligned with Deutsche Bank’s revenue expectations but surpassed projections on margins and the FY25 outlook.

The firm expects sales to grow in the mid-to-high single digits at constant exchange rates (CER), with core EBITA rising in the high single to low double digits.

“The robust outlook appears to set Novartis up for another year of nudging up street expectations,” analysts noted.

The firm also expressed optimism about Novartis’ pipeline, citing strong potential for late-stage assets, including ianalumab, pelacarsen, and remibrutinib.

Analysts noted that pelacarsen’s expected launch has shifted to early 2026 but still see “grounds for confidence on decent revenue growth into 2026 and possibly beyond, depending on pipeline delivery.”

The company’s Kisqali intellectual property risks have also diminished, reducing near-term uncertainties, said Deutsche Bank.

Deutsche Bank raised its price target for Novartis by 10% to CHF110, based on 14x estimated 2025 earnings.

The firm considers this valuation justified by Novartis’ recent commercial outperformance and the likelihood of another year of double-digit EPS growth.

Investing.com -- Kion (ETR:KGX) shares surged over 9% on Tuesday following its preliminary fourth-quarter results that exceeded market expectations, alleviating concerns about the group's profitability and operational strength.

The Germany-based manufacturer of industrial trucks and supply chain solutions reported a strong finish to 2024, with notable improvements in both revenue and margins, particularly in its Industrial Trucks & Services (ITS) division.

Analysts at Jefferies noted that ITS orders were robust, with margins outperforming expectations despite initial fears of a downturn.

The segment delivered an adjusted EBIT margin of 10.6%, an 85-basis-point improvement over prior estimates. This uptick provided relief to investors after a weaker showing in the third quarter, where margins had slipped to 10.1%.

Meanwhile, the Supply Chain Solutions (SCS) division also posted better-than-expected margin recovery, reflecting steady execution of its backlog, although order intake remained subdued.

Revenue for the quarter came in 2% ahead of consensus forecasts, while adjusted EBIT outperformed expectations by 17%, signaling strong operational efficiency.

Free cash flow was another highlight, finishing 32% ahead of Visible Alpha consensus estimates.

The company's disciplined approach to working capital management has been a key factor in its cash flow resilience post-pandemic.

Despite the strong finish to the year, Kion flagged challenges ahead. Competition from Chinese forklift manufacturers continues to pose a risk, particularly as they gain market share in Europe.

Additionally, restructuring measures announced by the company are expected to weigh on 2025 earnings.

Kion plans to incur costs between €240-260 million over the year as part of these initiatives, with projected annual cost savings of €140-160 million by 2026.

While these actions are likely to dampen near-term profitability, Jefferies analysts believe they will provide much-needed financial headroom for future investments, particularly in software and AI-driven supply chain solutions.

With the stock rebounding strongly in response to the latest results, investor sentiment appears to be shifting in favor of Kion.

Jefferies maintains a "buy" rating on the stock, with a price target of €51, implying a potential upside of 46% from current levels.

Investing.com -- Shares of OMV AG (ETR:OMVV) (VIE:OMV) fell by 1.2% as the market reacted to the company's fourth-quarter earnings report.

Despite a 14% beat on Clean CCS Net Income, which came in at €555 million compared to the consensus of €487 million, the company's cash flow from operations before working capital changes lagged behind expectations, contributing to the downward pressure on the stock.

The energy company's Clean CCS Earnings Before Interest and Taxes (EBIT) for the quarter were €1,375 million, aligning with the consensus of €1,381 million. OMV's Energy EBIT outperformed expectations by 8%, reaching €1,241 million against a consensus of €1,150 million, attributed to lower production costs and exploration expenses.

However, the Fuels & Feedstock segment underperformed, with an EBIT of €112 million falling short of the consensus estimate of €204 million. The company's Chemicals & Materials (C&M) EBIT was also slightly below consensus at €81 million versus €83 million.

The shortfall in cash flow from operations before working capital changes, which was 10% below consensus, was likely due to higher cash taxes and changes in provisions and emission certificates. Nevertheless, OMV managed to reduce its net debt by €0.3 billion to €1.5 billion.

Looking ahead, OMV provided guidance for FY25, outlining capital expenditures and production targets that were generally in line with expectations. The company anticipates refining margins of $6 per barrel, with a utilization rate of 85-90%, and expects improved margins and utilization in the Chemicals & Materials sector.

Jefferies analysts commented on the results, stating, "A positive update overall, mainly driven by a higher-than-expected DPS (set at €4.75 is ahead of Cons €4.68, regular dividend increases to €3.05/sh from €3.00/sh). 4Q results look relatively inline with better-than-expected Energy results, offset by lower-than-expected results in Fuels & Feedstock."

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Investing.com -- Infineon (OTC:IFNNY) Technologies (ETR:IFXGn) raised its full-year revenue outlook slightly on Tuesday, citing expected currency effects, after reporting a smaller-than-anticipated decline in fiscal first-quarter revenue.

The company's shares jumped roughly 10% in European trading.

The German chipmaker now expects revenue for the fiscal year ending in September 2025 to be flat or slightly higher compared to the previous year. The company had previously projected a slight decline, but adjusted its forecast based on a weaker euro against the dollar.

"Infineon has held up well in a weak market environment, closing its first quarter slightly ahead of expectations," CEO Jochen Hanebeck said in a statement.

Revenue for the first quarter dropped 8% to 3.4 billion euros ($3.5 billion), surpassing the company-provided analyst estimate of 3.2 billion euros.

The segment result margin, Infineon’s preferred metric for operating profitability, also exceeded expectations, coming in at 16.7% versus a forecast of 15%.

Barclays (LON:BARC) analysts said they “attribute the entire beat and raise primarily” to currency (FX) effects.

“The key question will be why IFX isn’t seeing the softness others have recently commented on, with its auto division better than expected in the reported quarter and expected to increase in the current quarter,” they added.

Barclays analysts estimate that Infineon's 2025 guidance suggests the company is trading at a price-to-earnings (P/E) ratio of 18 to 23 times. Assuming revenue growth of 5% to 15% in 2026, along with some margin expansion, the chipmaker’s valuation could range between 15 and 19 times earnings.

Investing.com -- Dassault Systèmes (EPA:DAST) on Tuesday reported solid results for the fourth quarter and full year 2024, driven by software revenue growth, new business acceleration, and an expanding 3DEXPERIENCE platform.

In the fourth quarter, total revenue reached €1.75 billion, reflecting a 7% increase compared to the previous year.

Software (ETR:SOWGn) revenue rose by 9% to €1.60 billion, with recurring revenue comprising 75% of software sales.

New business revenue saw growth at 13%, while 3DEXPERIENCE software revenue surged by 22%.

The company's operating margin stood at 36.3%, marking a 70-basis-point increase, and diluted earnings per share grew 11% to €0.40.

For the full year 2024, Dassault Systèmes reported €6.21 billion in revenue, representing a 5% increase.

Software revenue grew 6% to €5.61 billion, with recurring revenue accounting for 80% of total software sales.

The company's operating margin was 31.9%, while diluted EPS rose 9% to €1.28. The software company’s financial position remained strong, with operating cash flow reaching €1.66 billion and a net cash position of €1.46 billion.

Geographically, software revenue in Europe showed the strongest performance, growing by 14% and representing 43% of total software revenue.

The Americas saw a 5% increase, accounting for 37% of software revenue, while Asia posted a 7% rise, led by Japan and India.

By product line, Industrial Innovation software revenue increased 8% to €902 million, driven by strong adoption of 3DEXPERIENCE solutions, particularly in manufacturing.

Mainstream Innovation, which includes SOLIDWORKS and Centric PLM, posted a 17% growth rate, reaching €402 million.

Life Sciences software revenue remained flat at €298 million, though the MEDIDATA business returned to growth.

Dassault Systèmes' outlook for 2025 includes expected revenue growth of 6% to 8%, with an operating margin forecasted between 32.6% and 32.9%. Diluted EPS is projected to rise to a range of €1.36 to €1.39.

The company continues to focus on broadening its 3DEXPERIENCE platform and advancing artificial intelligence-driven services under its UNIV+RSES initiative.

Partnerships with major players such as Volkswagen (ETR:VOWG_p), Lockheed Martin (NYSE:LMT), and Airbus further support its expansion across industries.

Investing.com – Germany stocks were lower after the close on Monday, as losses in the Chemicals, Construction and Technology sectors led shares lower.

At the close in Frankfurt, the DAX lost 1.50%, while the MDAX index declined 1.48%, and the TecDAX index declined 1.34%.

The best performers of the session on the DAX were Rheinmetall AG (ETR:RHMG), which rose 1.14% or 8.60 points to trade at 764.00 at the close. Meanwhile, MTU Aero Engines NA O.N. (ETR:MTXGn) added 0.79% or 2.60 points to end at 333.30 and Deutsche Boerse AG (ETR:DB1Gn) was up 0.63% or 1.50 points to 239.90 in late trade.

The worst performers of the session were Volkswagen AG VZO O.N. (ETR:VOWG_p), which fell 4.10% or 4.04 points to trade at 94.60 at the close. Siemens Energy AG (ETR:ENR1n) declined 4.08% or 2.36 points to end at 55.48 and BASF SE NA O.N. (ETR:BASFN) was down 3.81% or 1.77 points to 44.83.

The top performers on the MDAX were Hensoldt Ag (ETR:HAGG) which rose 1.65% to 39.42, Scout24 AG (ETR:G24n) which was up 0.96% to settle at 94.65 and CTS Eventim AG (ETR:EVDG) which gained 0.85% to close at 95.20.

The worst performers were Thyssenkrupp AG O.N. (ETR:TKAG) which was down 5.70% to 4.53 in late trade, Aroundtown Property Holdings PLC (ETR:AT1) which lost 5.23% to settle at 2.72 and AUTO1 Group SE (ETR:AG1G) which was down 4.47% to 17.96 at the close.

The top performers on the TecDAX were Atoss Software AG (ETR:AOFG) which rose 3.29% to 119.40, Hensoldt Ag (ETR:HAGG) which was up 1.65% to settle at 39.42 and Deutsche Telekom AG Na (ETR:DTEGn) which gained 0.59% to close at 32.54.

The worst performers were Evotec AG O.N. (ETR:EVTG) which was down 3.93% to 8.31 in late trade, Elmos Semiconductor AG (ETR:ELGG) which lost 3.66% to settle at 68.40 and Aixtron SE (ETR:AIXGn) which was down 3.44% to 13.05 at the close.

Falling stocks outnumbered advancing ones on the Frankfurt Stock Exchange by 447 to 187 and 29 ended unchanged.

Shares in Rheinmetall AG (ETR:RHMG) rose to all time highs; up 1.14% or 8.60 to 764.00. Shares in Scout24 AG (ETR:G24n) rose to all time highs; rising 0.96% or 0.90 to 94.65. Shares in Deutsche Telekom AG Na (ETR:DTEGn) rose to 5-year highs; up 0.59% or 0.19 to 32.54.

The DAX volatility index, which measures the implied volatility of DAX options, was up 4.45% to 15.39.

Gold Futures for April delivery was up 0.76% or 21.61 to $2,856.61 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March rose 0.22% or 0.16 to hit $72.69 a barrel, while the April Brent oil contract rose 0.03% or 0.02 to trade at $75.69 a barrel.

EUR/USD was down 0.76% to 1.03, while EUR/GBP fell 0.75% to 0.83.

The US Dollar Index Futures was up 0.59% at 108.86.