BofA raises Fuchs SE stock rating to buy, hikes target to EUR55

On Tuesday, BofA Securities analyst Matthew Yates upgraded Fuchs SE stock from Neutral to Buy, setting a new price target at EUR55.00, up from the previous EUR42.00. The upgrade reflects the analyst’s view that Fuchs SE, a $5.8 billion market cap company currently trading near its 52-week high, is well-positioned to benefit from potential fiscal stimulus that could boost economic growth in the country in 2026/27. According to InvestingPro data, the company maintains a strong financial health score and appears fairly valued based on its Fair Value analysis.

Yates highlighted the importance of lubricants in industrial production, suggesting that Fuchs SE stands to gain from increased infrastructure and defense spending in Germany. The company’s solid financial position, with a gross profit margin of 34.2% and moderate debt levels, supports its growth potential. However, he also acknowledged near-term risks, including the potential impact of a trade war on global growth and North American auto production, which accounts for an estimated 6% of Fuchs SE’s group sales.

InvestingPro subscribers have access to over 10 additional key insights about Fuchs SE, including detailed financial health metrics and growth indicators.

Despite these risks, the analyst believes that investors may be inclined to look beyond the immediate future, considering the positive policy changes in Germany and the company’s track record of outperforming its end markets. This performance is attributed to Fuchs SE’s segmented approach to application development, complemented by its impressive 22-year streak of consecutive dividend increases.

Yates also noted that an end to the conflict in Ukraine could bring additional benefits to Fuchs SE by reducing costs for raw materials. He pointed out that Fuchs SE’s close relationships with customers typically provide the company with significant pricing power.

The analyst’s comments suggest that while the outlook for 2025 is cautious, with expected EBIT around EUR460 million, the long-term prospects for Fuchs SE appear favorable, especially if the company can capitalize on Germany’s supportive fiscal environment and resolve broader geopolitical tensions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.