DAX Shares from Allianz, Deutsche Telekom, and others show potential for acquisition in the latter part of the year
In the latest business news, Germany's leading corporations, known as the DAX members, have seen significant profit increases in the second quarter. Operating profit of these corporations rose by an impressive 17 percent, according to recent reports.
One such corporation, Henkel, is benefiting from a strategic shift in its business. Henkel's CEO, Carsten Knobel, has combined the cosmetics and laundry business to cut costs and boost growth. This strategic move seems to be working, as the company is more optimistic about the full year due to the better performance of its newly created consumer brands division. Henkel may, in fact, be an undervalued turnaround candidate due to this strategic shift.
Another company making headlines is Fresenius. Despite facing challenges, Fresenius may be an undervalued turnaround candidate, having exceeded expectations and now targeting the upper half of its profit forecast.
However, not all news is positive. Allianz has incurred approximately 300 million euros in costs due to flooding in southern Germany. Despite these flood-related setbacks, Allianz remains on track to reach the upper end of its annual operating profit forecast of 15.8 billion euros. Allianz continues to be a top dividend stock with prospects for further increasing payouts.
Investment opportunities within the DAX stocks are plentiful. Selectively undervalued companies such as Volkswagen and Mercedes-Benz Group, despite some risks like tariff impacts and margin pressures, show potential. A diversified approach with DAX ETFs as a complement to broader global equity investments is also recommended for long-term wealth building.
It's important to note that two of the publishers of this news, Börsenmedien AG, have CEOs with positions in Allianz and Deutsche Telekom, and related derivatives.
Deutsche Telekom, a defensive growth stock, is another core investment, with the price target for the company slightly raised. Many cyclical stocks are moderately valued but may need time for a trend reversal.
Lastly, more than two-thirds of DAX members have exceeded analyst expectations. Companies like Allianz, Munich Re, and Hannover Re have all exceeded consensus estimates, signalling a robust and resilient German economy.
This article first appeared in the new print edition of BÖRSE ONLINE.
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