The DAX Index has come under pressure over the past few months. After peaking at 26,630 points in August, it has dropped to its current level of 25,150. The retreat coincided with weakness in European equities and rising crude oil prices. This article highlights some of the top German stocks to watch next week.
Deutsche Bank
Deutsche Bank, like other European banks, has come into a bear market this year. It has plunged from a high of €35.85 in September to the current €27.67, its lowest level since June 12.
The retreat has happened as investors book profits in European banks. Also, the investment banking industry has gone through a significant slowdown in the second half of the year as interest rates have soared.
The most recent results showed that Deutsche Bank’s revenue rose by 9% to €8.5 billion, while its profit soared by 10% to €1.9 billion. Most notably, the company’s return on tangible equity rose to 11%. The upcoming earnings will provide more color on its business and the outlook for the year.
BASF
BASF, a top chemicals company, will be in the spotlight as it publishes its financial results. These numbers come at a time when its stock is in a recovery mode. It jumped from a low of €46 in July to the current €52.79.
The upcoming results will be important as the company is in talks to acquire Evonik, a company that makes 100s of chemicals. Evonik has already rejected the $11.7 billion offer, noting that it undervalued the company.
BASF is still interested in Evonik, with management hinting that it may hike the offer to $12.9 billion. Evonik, on the other hand, is considering buying Ashland, an American company.
The most recent numbers showed that BASF’s sales jumped to €17.2 billion in the first half of the year. Its EBITDA jumped by 48% to €1.96 billion, with the net income hitting €4.1 billion.
Mercedes-Benz, Porsche, and Volkswagen
German automakers will be in the spotlight next week as they publish their earnings. These results come at a time when these companies are going through a big challenge, which explains why the stocks have dropped.
Mercedes-Benz stock has dropped by over 33% from its highest point this year. Porsche has dropped by 16% from the year-to-date high, while Volkswagen is down by over 32% from its peak last year. VW is hovering near its lowest level in decades.
The three companies have made some major announcements lately. Volkswagen is considering large layoffs to reduce its costs and boost profitability. Porsche, on the other hand, is focusing on becoming a more premium brand by focusing on value over volume. It is also working on building the sportiest vehicle in every segment. It also lowered its breakeven point to below 200k vehicles.
These developments come at a time when European companies are facing challenges in the Chinese market, where they had a big market share. Today, many Chinese brands like BYD, Nio, and Xiaomi are gaining market share.
Other top DAX companies will publish their earnings next week, including Linde, MTU Aero, Covestro, and Beiersdorf.
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