FRANKFURT (dpa-AFX) - Deutsche Bank's research division expects positive momentum in sales and earnings at car rental company Sixt in the course of the year. In addition, the company manages residual value risks very well, praised analyst Michael Kuhn and upgraded the share from "Hold" to "Buy" in a study published on Thursday. He left the target price unchanged at 120 euros, which would still mean a plus of 28 percent in view of the approximately eight percent jump in the share price on that day.

"The main reasons for our downgrade of the Sixt share in July 2023 were the negative expected earnings momentum as well as the equally negative development in revenue per day (RPD) and used car prices," explained Kuhn. Now, however, in view of the mean value of the forecast range given by Sixt for earnings before taxes in the first quarter and the full year, an increase compared to the same period of the previous year is to be expected for the rest of the year.

In addition, the Deutsche Bank expert expects daily revenue per car to return to growth territory in the next twelve months. "At the same time, Sixt has proven that it can manage residual value risks very well and was significantly less affected by falling residual values of electric cars than some of its competitors."

According to Kuhn, a possible escalation in the Middle East could exert short-term pressure on the share price. However, Sixt is not directly involved in this region and the MDax group's vacation business is mainly dependent on short-haul travel. In addition, Sixt's profits have proven to be largely resilient in past crises.

The analyst also considers it positive that the search for a successor to the current CFO has come to an end. A week ago, the car rental company announced that Franz Weinberger would replace Kai Andrejewski on June 1. The contract of Andrejewski (56) would then expire as normal. The 41-year-old Weinberger has been working for Sixt since 2013 and is currently still Head of Corporate Finance.

With a "Buy" rating, Deutsche Bank recommends buying the share based on the expected total return for the next twelve months./ck/men/jha/

Analyzing institute Deutsche Bank.

Publication of the original study: 18.04.2024 / time not specified / GMT First dissemination of the original study: 18.04.2024 / 04:33 / GMT