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Following the strong performance of the Rheinmetall stock, an expert with declining optimism rushes forward on Thursday. British investment bank HSBC has given up on its purchase rating, which is rare among analysts at the moment. Only in early May was there a downgrade by Deutsche Bank Research. Since then, various experts have expressed optimism, including Goldman Sachs, Warburg and Oddo BHF with positive recommendations.
HSBC analyst Richard Schramm lowered his vote in a study available Thursday from “buy” to “hold”, although he raised the price target from € 220 to € 240. Since the beginning of the year, the cards of the auto supplier and the armaments group have currently increased by 150 percent, to the top even up to 170 percent. In view of the war in Ukraine, Western investment in defense acted as the main driver.
Against this backdrop, Schramm has raised his growth expectations for the group’s armaments division, but according to his own statement he remains somewhat cautious. While there is pure optimism in this division, investors are ignoring a major drag on the second core segment, he says. In general, dark clouds are piling up in the auto industry.
At the price level, which was still close to a record € 225 just before the study was published, the document no longer promises any attractive pricing potential. After falling the day before, Rheinmetall shares fell 3.2% again on Thursday. They are currently trading at EUR 210.60.
HSBC always rates those stocks as “Hold” whose price target is up to 5% above or below the current price ./tih/ajx/nas
Rheinmetall receives a new order from the German Air Force
Rheinmetall has received a new order for ground launch devices for German aviation from the Federal Office for Equipment, Information Technology and Use of the armed forces (BAAINBw) obtained. According to the announcement, the framework agreement amounts to 13 million euros and has a duration of three years. In the period from 2022 to 2025, Rheinmetall will deliver 16 new mobile ground launch devices with integrated ground power (MSU-GP). The contract also includes the upgrade of the 48 MSU-E units currently in operation to the latest MSU-GP version. The German Air Force has been using the Rheinmetall MSU for its entire fleet of aircraft since 2014, including the Eurofighter.
Rheinmetall’s ground launch devices are used in both military and civil applications. The systems can be found in airports around the world – a total of over 1,200 copies have been delivered to more than 40 countries. According to Rheinmetall, the launch devices are also used by the United States Navy on all aircraft carriers in the military sector. They are also used by major German airlines such as British Airways, American Airlines, Air New Zealand and Fedex.
Rheinmetall stock lost a whopping 5.01 percent on XETRA at close of trading at € 206.70. In recent weeks, however, the stock has also risen rapidly.
LONDON / FRANKFURT (dpa-Broker AFX / Dow Jones)
The leverage must be between 2 and 20
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