Deutsche Bank and Nio, different sectors, but same fate
Deutsche Bank and Nio, different sectors, but same fate
World News

Deutsche Bank and Nio, different sectors, but same fate

By George Michael Belardinelli - 4 Jan 2023

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According to Ames Von Moltke, CFO of Germany’s largest bank, the prediction is confirmed and a bright future is expected for Deutsche Bank. 

Deutsche Bank stock analysis

With a result in line with the market trend, the share price on the stock market gained 1.22%. 

The German bank’s executive added that the German bank’s medium-term goals have not changed and that the bank will bring home all the targets it set in its restructuring plan between now and 2025.

Deutsche Bank’s chief financial officer told microphones the following:

“We want to achieve a return on tangible equity (Rote) after tax above 10% and reduce the cost-income ratio below 62.5%”, explained the manager, excluding that the developments of recent months (Guerra in Ukraine, inflation, rising interest rates) “make it necessary to change our strategy.”

Going more in-depth, and analyzing the stock, we discover something quite interesting. 

On the weekly, in the stock market, the German bank (the first by assets in Germany) confirms positive relative strength against the DAX. 

In essence, investors prefer to invest in the bank than in the index; those who have followed this line of reasoning will be able to rejoice at the +3.46% achieved by Deutsche Bank in the last trading week versus +2.21% against the DAX in Frankfurt.

At this stage, Deutsche Bank has all the cards to do well, the stock is strengthening and the resistance area, technically is placed at 11.19 Euro while the main and first support is instead placed at 10.92 Euro.

Most analysts are in agreement with a bull precision for the stock by setting the resistance high at 11.45 Euro.

Nio’s performance

The company created as China’s answer to Elon Musk‘s more emblazoned Tesla suffered a setback in 2022, one that to be fair was also suffered by other brands in the automotive sector. 

Analysts at Deutsche Bank and other lending institutions have reaffirmed their Buy rating with a price target set at $21.00 for the automotive stock (NYSE: NIO ) due in part to the cutback in guidelines the EV maker has decided to make in recent days. 

Many logistical and operational problems have held back vehicle production at Nio in the last quarter, most notably among them weighed problems with cast metal parts, EDS assembly, silicon carbide supply, and last but not least problems related to finished product delivery due to slowdowns because of Covid closures in China and exorbitant costs. 

The light at the end of the tunnel, however, seems close and analysts believe that the problems the company has been facing are likely to fade in the short term, especially in the context of Li Auto (NASDAQ: LI) and Xpeng (NYSE: XPEV) outperforming forecasts as well as Zeekr succeeding in doing better than its 2022 targets.

A reason for the uncertainty is the ability of NIO’s management, which when faced with the challenge of launching two more automotive brands is to grow in the old continent may not have the skills and experience to achieve such challenging targets but only time will reveal how things will turn out. 

Deutsche Bank analysts state the following:

“Basically, our feeling is that the company has been overly aggressive in trying to implement new manufacturing process technologies and simply hasn’t focused enough on supply chain risk mitigation. It is unclear whether this is a structural or staffing issue (or both), but we believe the management team are now very much aware of these shortcomings and would expect better execution in 2023. All operational bottlenecks in suspended will be resolved by the end of the first quarter.”

Meanwhile, the share price on the stock market is going strong, and NIO had appreciated 3.08% in Tuesday’s premarket trading and then climbed up 1.23% at the time of writing. 

George Michael Belardinelli

A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality

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