Friday, June 2, 2023

The trio of aces that drove the German DAX to an all-time high

German DAX adds and continues. The indicator has registered a growth of 2% over the past week, while if its current levels are compared with those at the end of last year (13,923.59 points), the cumulative growth so far this year is already close to 17%. As a result, the index is currently at an all-time high. If you were born in 1987 with a level of 1,000 points, you are currently above 16,200 points.

One factor to keep in mind is that the DAX currently measures the performance of the 40 largest German companies in terms of volume and market capitalization, but this was not always the case. Earlier, it was named DAX 30, but as of September 20, 2021, the index was renamed to DAX 40 and included 40 names instead of 30.

The trio of aces that drove the German DAX to an all-time high

The companies that make up the index are considered blue chips, that is, the largest companies with a national reputation for superior quality, reliability, and the ability to remain profitable in both good and bad economic conditions.

And three of them have particularly shone in this 2023, which is set to grow by over 30%. The best behavior during these almost five months of the year is matched by Fresenius Medical Care. The listed company, specializing in the production of medical supplies specifically for kidney dialysis, has accumulated revaluation so far this year that is close to 40%, with a market capitalization of more than 12,500 million euros.

However, this impressive rally seems to be making analysts cautious about its future in the stock market. The analysis houses’ consensus recommendation is ‘hold’, but the objective price given by experts is about 10% below its current price, at 38.53 euros, according to data compiled by Reuters.

Better prospects are offered by a company better known to Spanish investors, Siemens Energy. Siemens Gamesa’s parent company projects a 37% market share gain in 2023, and analysts give it room to grow at least 9%. Specifically, analysts have an average ‘Buy’ recommendation and a price target of EUR 26.33.

The trio of DAX aces is completed by HeidelbergCement with a rise in the index of 32%. The German multinational focused on cement and construction materials presents additional potential for this 5.9% growth, with analysts giving it an average price target of EUR 74.23 and a ‘Hold’ recommendation.

Among the companies with the highest capitalization in the DAX, SAP, a technology company with a market value of 153,000 million euros, is up 29% so far this year. Siemens AG, with a market value of 136,000 million euros, accumulates an inconsistent growth of 23%. Also followed is Deutsche Telekom (103,500 million) with a market capitalization of over 100,000 million euros, which grew 16.5% on the year.

Nation World News Desk
Nation World News Desk
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