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On Thursday, Deutsche Bank (ETR:DBKGn) analysts adjusted their outlook on Schaeffler AG (ETR:SHA_p) (SHA:GR) (OTC: SFFLY), reducing the price target to EUR4.00 from the previous EUR4.50, while maintaining a Hold rating on the stock. The revision follows Schaeffler’s Q4-24 earnings report, which aligned with preliminary warnings and introduced a guidance that analysts found underwhelming in terms of earnings and cash flow expectations.
The guidance takes into account the integration of Vitesco and the challenges faced in both Automotive and Industrial end markets. It is perceived as setting a conservative benchmark for 2025 and offers an initial insight into the financial outcomes under the company’s new divisional structure, which will be further detailed at the Capital Markets Day in September.
The key to Schaeffler’s mid-term earnings growth, according to Deutsche Bank, lies in the success of its e-mobility division reaching positive earnings. Despite a less than favorable cash flow guidance, affected by restructuring costs, Schaeffler’s management has proposed a dividend of EUR0.25 per share, justified by robust adjusted free cash flow (FCF) generation.
Following the latest financial disclosures, Deutsche Bank has refined its earnings estimates for Schaeffler for the year 2025 and beyond. The lowered target price to EUR4.00 reflects the bank’s updated assessment of the company’s financial trajectory.
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