Traton expects weak truck demand in 2025 amid economic slowdown

Investing.com -- LEG Immobilien (ETR:LEGn) reported its results on Monday, showcasing a stable performance amidst challenging market conditions.

The German residential real estate company said its net cold rent increased by 3.3% to €643.8 million, up from €623.5 million during the same period in the previous year.

The recurring net operating income (NOI) saw a 2.6% rise, reaching €530.3 million compared to €516.9 million in the prior year.

However, adjusted EBITDA saw a slight decline of 3.1%, amounting to €491.7 million, down from €507.3 million. Similarly, funds from operations decreased by 6.6% to €329.3 million, from €352.6 million in the previous year.

Despite these mixed results, LEG Immobilien maintains a robust balance sheet. Investment properties constitute 95% of the company’s total assets, and notably, the company does not recognize any goodwill in its financial statements.

According to analysts at J.P. Morgan, property values turned the corner in the second half of 2024, rising by 0.4%, which supported an EPRA Net Tangible Assets per share valuation of €125.9 (compared to J.P. Morgan’s estimate of €125.1).

Like-for-like rental growth continued at 3.4%, while the EPRA vacancy rate edged down to 2.3% in Q4 2024 from 2.4% in Q3 2024.

AFFO rose by 10.6% to €200.4 million, and the company sold approximately 2,500 apartments for €255 million to strengthen its balance sheet, achieving an overall book profit.

Net sales proceeds amounted to €180 million, while ownership transfer of an additional 1,800 units, valued at €150 million, is expected to generate €62 million in net sales proceeds and a book profit.

CEO Lars von Lackum emphasized a continued focus on a liquidity-oriented strategy during volatile times.

For the 2025 financial year, LEG forecasts AFFO between €205 million and €225 million, representing a midpoint increase of 7.3% over 2024’s AFFO of €200.4 million, driven primarily by improved operating earnings and better net interest income.

The company plans to invest €35 per square meter in its portfolio in 2025, exceeding the previous year’s level of €33.99 per square meter.

Analysts at Morgan Stanley have observed that LEG Immobilien continues to navigate the current economic landscape effectively, balancing growth with prudent financial management.

However, J.P. Morgan analysts noted that despite LEG’s solid fundamentals, broader macroeconomic factors could weigh on the stock’s performance.

The J.P. Morgan Rates Strategy team recently raised their end-of-year forecast for Germany’s 10-year yield to 2.40% from 2.05%, while the yield on LEG’s 2034 eurobond rose from 3.7% at the end of February to 4.3% last week.

As a result, renewed concerns around property values and long-term debt costs could keep investor interest on the sidelines for now.

On Friday, Porsche SE, the majority shareholder of Volkswagen (ETR:VOWG_p), announced an anticipated loss after tax of approximately 20 billion euros ($21.7 billion) for the year 2024. This projection is based on impairments related to its investment in Volkswagen, which were first made public in December. These impairments are a direct reflection of significant declines in the market value of both Volkswagen and Porsche AG. Currently, Porsche SE holds a 31.9% stake in Volkswagen and a 12.5% stake in Porsche AG.

The financial forecast for Porsche SE was previously uncertain due to Volkswagen’s challenges, which included disputes with unions concerning plant closures and wages. These issues had a substantial impact on Volkswagen’s annual planning and led Porsche SE to withdraw its profit outlook at that time.

Porsche SE is set to publish its complete annual financial results on March 26. The impairments on its holdings in Volkswagen and Porsche AG have been calculated at 19.9 billion euros and 3.4 billion euros, respectively. These figures are at the high end of the ranges that Porsche SE had previously communicated and are non-cash effective.

The company also provided an update on its financial position, forecasting a net debt of 5.2 billion euros by the end of 2024. Despite the anticipated loss, Porsche SE confirmed its intention to distribute dividends for the past fiscal year, although specific details regarding the dividend were not disclosed.

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Investing.com – Germany stocks were lower after the close on Friday, as losses in the Industrials, Pharmaceuticals & Healthcare and Construction sectors led shares lower.

At the close in Frankfurt, the DAX declined 1.79%, while the MDAX index lost 2.25%, and the TecDAX index fell 1.86%.

The best performers of the session on the DAX were Deutsche Telekom AG Na (ETR:DTEGn), which rose 3.09% or 1.02 points to trade at 34.07 at the close. Meanwhile, E.ON SE (ETR:EONGn) added 2.75% or 0.35 points to end at 12.88 and Henkel & Co KGaA AG Pref (ETR:HNKG_p) was up 1.02% or 0.88 points to 87.26 in late trade.

The worst performers of the session were Rheinmetall AG (ETR:RHMG), which fell 7.01% or 84.00 points to trade at 1,115.00 at the close. Bayer AG NA (ETR:BAYGN) declined 6.46% or 1.61 points to end at 23.25 and MTU Aero Engines NA O.N. (ETR:MTXGn) was down 5.68% or 19.80 points to 329.00.

The top performers on the MDAX were Delivery Hero AG (ETR:DHER) which rose 1.48% to 28.84, Freenet AG NA (ETR:FNTGn) which was up 0.23% to settle at 34.72 and Tui AG NA (ETR:TUI1n) which gained 0.19% to close at 7.21.

The worst performers were Hensoldt Ag (ETR:HAGG) which was down 13.15% to 63.40 in late trade, Siltronic AG (ETR:WAFGn) which lost 9.76% to settle at 45.30 and Hochtief AG (ETR:HOTG) which was down 7.20% to 163.70 at the close.

The top performers on the TecDAX were Deutsche Telekom AG Na (ETR:DTEGn) which rose 3.09% to 34.07, CompuGroup Medical AG O.N. (ETR:COP1n) which was up 0.44% to settle at 22.60 and IONOS Group SE (ETR:IOSn) which gained 0.43% to close at 23.50.

The worst performers were Hensoldt Ag (ETR:HAGG) which was down 13.15% to 63.40 in late trade, Siltronic AG (ETR:WAFGn) which lost 9.76% to settle at 45.30 and Carl Zeiss Meditec AG (ETR:AFXG) which was down 5.52% to 60.75 at the close.

Falling stocks outnumbered advancing ones on the Frankfurt Stock Exchange by 379 to 235 and 30 ended unchanged.

Shares in Henkel & Co KGaA AG Pref (ETR:HNKG_p) rose to 3-years highs; rising 1.02% or 0.88 to 87.26. Shares in Freenet AG NA (ETR:FNTGn) rose to all time highs; gaining 0.23% or 0.08 to 34.72.

The DAX volatility index, which measures the implied volatility of DAX options, was up 2.83% to 22.81 a new 6-months high.

Gold Futures for April delivery was down 0.12% or 3.40 to $2,923.20 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in April rose 1.21% or 0.80 to hit $67.16 a barrel, while the May Brent oil contract rose 1.37% or 0.95 to trade at $70.41 a barrel.

EUR/USD was up 0.57% to 1.08, while EUR/GBP unchanged 0.35% to 0.84.

The US Dollar Index Futures was down 0.31% at 103.71.

Investing.com -- Deutsche Bank has upgraded DHL Group. (ETR:DHLn) to "buy" from "hold," and raised its price target to €50 from €36, citing a more realistic earnings outlook and de-risked guidance.

Analysts noted, "We were concerned about the risk to management guidance and the lack of a turn in the freight cycle and this indeed has played out."

DHL Group on Thursday reported a strong Q4, with operating profit (EBIT) of €1.85 billion, exceeding consensus estimates by 4%.

“(The) results allow us to pivot our view as guidance has been de-risked and re-based down to more achievable levels,” the analysts added.

The Express division led the gains, delivering EBIT of €1.08 billion—11% above expectations—driven by solid pricing strategies and cost controls. Overall revenue grew 6% year-over-year to €22.7 billion.

For 2025, DHL forecasts EBIT of at least €6 billion, slightly below the market consensus of €6.29 billion.

Its 2026 target has been revised to a more conservative €7 billion due to macroeconomic uncertainties. Analysts see this cautious approach as removing the overhang of overly ambitious projections.

To enhance shareholder returns, DHL announced a €3 billion share buyback program for 2025-2026, equating to €1.5 billion annually, boosting total cash returns—including dividends—to around 8%.

While the Post & Parcel division posted solid EBIT of €326 million and the eCommerce segment saw a 39% year-over-year jump to €106 million, the Global Forwarding & Freight division underperformed with EBIT of €255 million, 7% below expectations.

Investing.com -- Goldman Sachs expects the AI trade to regain momentum sooner rather than later, despite recent market volatility that has weighed on AI-exposed equities.

Macroeconomic concerns and positioning unwinds have weighed on AI-related stocks, with Nvidia (NASDAQ:NVDA), a key Phase 1 name in Goldman’s AI trade framework, falling 21% since the S&P 500’s peak on February 19.

AI infrastructure stocks (Phase 2) and AI-enabled revenue stocks (Phase 3) have also underperformed, down 14% and 12%, respectively. But despite the short-term jitters, Goldman remains optimistic about the AI trade’s overall trajectory.

"We expect continued technological progress and earnings growth will lead investors to eventually reengage with AI stocks," strategists led by Ryan Hammond wrote.

They believe that Phase 3 stocks, which generate revenue from AI applications, offer a more attractive risk-reward proposition compared to infrastructure stocks in Phase 2.

"Even after the sell-off, the relative valuation of AI Phase 2 stocks is still slightly above its historical average, while AI Phase 3 stocks trade slightly inexpensive vs. history," strategists noted.

Of the 40 Phase 3 stocks that Goldman covers, 27 are Software (ETR:SOWGn) companies. Stocks that the firm expects to see the fastest sales growth over the next two years are Palantir Technologies Inc (NASDAQ:PLTR), Cloudflare Inc (NYSE:NET), SentinelOne Inc (NYSE:S), and Gitlab Inc (NASDAQ:GTLB).

A key driver for AI-exposed stocks will be broader adoption of AI technologies across industries. While Goldman’s Phase 4 basket, which tracks companies benefiting from AI-driven productivity gains, remains unchanged, the firm highlighted early adopters that are already seeing tangible benefits.

Companies such as Amazon (NASDAQ:AMZN), Cognizant (NASDAQ:CTSH), and Walmart (NYSE:WMT) have identified AI-driven efficiency improvements in areas including customer support, coding, and supply chain management.

Investor sentiment and economic data will also play a key role in determining when AI stocks recover.

Goldman’s Sentiment Indicator, a contrarian gauge of positioning, remains above "trough" levels seen in past market corrections, suggesting that further downside could be needed before a rebound.

“We expect growth data will be key for the path of US equities and Friday’s jobs report will represent a major test. Alternatively, the equity market would benefit from an easing of tariff policy, but uncertainty remains high,” strategists added.

“However, we expect continued technological progress and earnings growth will lead investors to eventually reengage with AI stocks and we continue to believe that AI Phase 3 offers better risk/reward for new capital than AI Phase 2,” they concluded.