Deutsche Bank Cuts Price Targets on European Stocks Ahead of Earnings Season – Orsted Takes Biggest Hit

Ahead of Earnings Season, Deutsche Bank Adjusts Price Targets on European Stocks

Ahead of the upcoming earnings season, Deutsche Bank has made changes to price targets for nearly 30 European stocks. The bank’s analysts have upgraded one stock to a “buy” rating while cutting price targets on others.

Denmark’s Orsted faces significant reduction in price target

Deutsche Bank’s biggest price target cut was for Denmark’s energy giant, Orsted. The bank’s analysts reduced their 12-month share price forecast for Orsted by 36% to 450 Danish krone ($64) on October 16. The stock has experienced a significant decline this year, with the current trading price around 320 krone. Challenges in the wind turbine industry, including supplier delays, lower tax credits, and the possibility of a large impairment charge in its U.S. offshore wind portfolio, have contributed to the decline.

Top 10 stocks facing major price target decreases

According to Deutsche Bank’s note on October 16, the table below highlights the stocks that experienced the biggest cuts to their price targets:

Positive outlook for European utility sector despite price target cuts

Deutsche Bank remains optimistic about the European utility sector despite the reduction in price targets. The bank’s analysts assert that investors might be overestimating the impact of rising bond yields and are becoming too pessimistic about the renewable energy outlook. Deutsche Bank prefers integrated utilities like RWE, Enel, SSE, and E.ON and maintains a “buy” rating on these stocks, albeit with lower price targets.

Online food delivery industry shows signs of stabilization

Deutsche Bank’s proprietary data indicates that demand for takeaway apps in the online food delivery industry is stabilizing across the markets it monitors. The bank expects to hear a positive message regarding demand outlook from Delivery Hero and Just Eat Takeaway.com. However, Deutsche Bank did reduce price targets on both stocks, while maintaining a “buy” rating on Takeaway.com and a “hold” rating on Delivery Hero.

Rising rates pose challenges for Italian lenders

Deutsche Bank notes that rising rates are becoming a hindrance for Italian lenders as higher yields dampen client appetite for managed assets. As a result, Fineco Bank was downgraded to “hold.” The bank anticipates that the negative impact on Fineco Bank’s share price performance from the “cash-sorting effect” will persist for the “foreseeable future.”

Italgas receives the only upgrade

Deutsche Bank’s analysts upgraded their rating on Italian natural gas company Italgas to “buy,” although they did lower its price target by 5%.