FRANKFURT (dpa-AFX) – After a strong start to the week on the German stock market, prices fell again on Tuesday. Significant declines in Airbus shares, in particular, initially put an end to the flagship index’s rebound. The aircraft manufacturer has lowered its profit and delivery targets for this year.
In early trading, the Dax fell one percent to 18,138 points. The MDax of average stock market values lost 0.7 percent to 25,528 points. The euro zone’s flagship index, the EuroStoxx 50, was also down 0.6 percent.
Airbus lowered its annual targets due to an asset write-down in its aerospace division and ongoing problems in its supply chain. Adjusted profit before tax and interest is now expected to be only around 5.5 billion euros this year, instead of the 6.5 to 7.0 billion euros previously forecast. In addition, Airbus is only expected to deliver around 770 planes in 2024, instead of the around 800 planes previously targeted.
This caused the price of Airbus, heavyweight of the Dax, to plunge by almost 9%. One trader called it a “stark profit warning”. Banks like JPMorgan and RBC have already lowered their price targets for the stock and Deutsche Bank dropped its buy recommendation. The stock of engine manufacturer MTU lost more than 4 percent in the wake of Airbus shares.
Merck KGaA also reported bad news. The pharmaceutical and chemical group is ending two studies already well advanced on the promising drug Xevinapant. Analysts until now believed that this cancer drug would become a success with sales in the billions. Merck shares fell 10 percent. Citigroup’s Peter Verdult called it a “bitter pill.”
At plastics manufacturer Covestro, investors welcomed the savings plans. The company wants to save 400 million euros per year by the end of 2028, almost half of which in Germany. The stock, which had been brought the day before by buyout speculation to its highest since February 2022, increased by 1.5%.
Among smaller stocks, shares of Hornbach Holding gained 4.2 percent. The DIY group saw its turnover increase at the start of its new financial year thanks to better weather in March and April./bek/tih
