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On Thursday, Deutsche Bank (ETR:DBKGn) analysts, led by Nicolai Kempf, adjusted their outlook on Daimler Truck Holding (ETR:DTGGe) AG (DTG:GR) (OTC:DTRUY), reducing the price target from €47.00 to €44.00, while still recommending the stock as a Buy. The revision follows Daimler (OTC:MBGAF)’s first-quarter earnings report, which surpassed expectations by 14% due to a notably robust performance in the United States and positive impacts from warranty releases. Kempf noted that excluding these warranty effects, the earnings would have aligned with analysts’ predictions.
The report also reflected a forecasted downturn in North American volume, which was expected after weaker April orders and commentary from industry peers. Despite this, Deutsche Bank acknowledged the company’s positive outlook for the second quarter, which is contingent on a recovery in North American orders. The firm emphasized that this metric, alongside the Capital Markets Day in July, where Daimler is set to discuss restructuring efforts in Europe and capital allocation strategies, will be pivotal for the stock’s short-term trajectory.
Kempf’s commentary highlighted that while the lowered price target reflects a more cautious stance, the Buy rating is sustained due to the company’s overall strong performance and potential growth prospects. Daimler’s first-quarter success, particularly in the U.S. market, has been a driving factor in maintaining investor confidence, even as the company navigates through anticipated challenges in order volumes and implements restructuring measures in the coming months.
Investors are now looking towards the Capital Markets Day in July for further details on the company’s strategic plans and how they will address the evolving market conditions, especially in the European sector. The event is expected to provide a clearer picture of Daimler Truck’s approach to capital allocation and the steps it will take to enhance its long-term profitability and market position.
Deutsche Bank’s revised price target of €44.00 reflects a blend of caution due to the current market dynamics and optimism rooted in Daimler Truck’s underlying business strengths and strategic initiatives. The firm’s stance indicates a belief in the company’s capacity to navigate near-term headwinds and capitalize on opportunities for growth.
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