Stock Take 16/04/2021

Profit jump at Morgan Stanley

The stock market boom has given US investment bank Morgan Stanley a tailwind at the start of the year. The institution earned 3.98 billion dollars in the first quarter, 150 per cent more than a year ago, Morgan Stanley reported on Friday. Analysts had expected much less. Revenue rose 61 per cent to 15.7 billion dollars. Rivals such as JPMorgan, Goldman Sachs and Citigroup also benefited from a flourishing capital market business and expanded their profits.

As in the second half of 2020, trading in stocks and bonds was good at the start of the year. Companies were more active in the capital markets because of the pandemic and issued more bonds. There were also more IPOs again.

Despite the positive result, Morgan Stanley shares lost 2.77 per cent to 78.58 US dollars by close of business in trading on the New York Stock Exchange (NYSE). 

Tesla attacks the next trillion-dollar market

Jed Dorsheimer, an analyst at Canaccord, sees a potential upside of 1,071 US dollars for Tesla shares. Previously, he saw the stock fairly valued at 419 US dollars. Tesla has a multi-year head start in e-mobility and will now use this to aggressively expand into the field of energy generation and energy storage, Dorsheimer said in his latest analysis. He assumes that Tesla could achieve a turnover of 8 billion US dollars in this business area by 2025. Tesla is exploiting all available resources to meet the demand for batteries. In line with this assessment, Tesla’s innovative solar roof is to be launched on the European market this year. 

Furthermore, Dorsheimer believes that Tesla is in the process of becoming an “Apple-like” brand and is building an ecosystem of energy products also to become a leading brand for batteries and energy storage, which could further strengthen Tesla’s competitive advantage.

Morgan Stanley also remains bullish on Tesla stock. Tesla could benefit massively from the US government’s proposed $174 billion investment in electric vehicle infrastructure and further expand its pace-setting role in the industry. Dorsheimer’s newly announced price target suggests a potential upside of almost 60 per cent for a stock that has already increased six-fold in the past year. However, the Canaccord analyst sees this valuation as justified by Tesla’s strong lead over the competition and its expansion into new markets.

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Daimler, with robust start to the year

Daimler has again noticeably exceeded market expectations thanks to strong car sales in China and good selling prices. According to the surprisingly presented key figures for the first quarter, business with premium cars once again gave a particular boost. The DAX group increased its operating profit many times over compared to the previous year.

The market environment was “very pleasing”, Daimler CEO Ola Källenius explained the strong development. According to the statement, the group’s EBIT climbed to 5.75 billion euros after 617 million in the previous year. Analysts had only expected €4.96 billion, Daimler said. Adjusted, the operating result was 4.97 billion euros. The free cash flow of the industrial business reached 1.81 billion euros. In the previous year, 2.32 billion euros minus were posted. Analysts had expected only 1.10 billion euros.

A year ago, the plant closures to contain the pandemic and the reluctance of customers to buy cars had put a massive strain on the Stuttgart-based group as well as the entire car industry. Daimler AG will publish its detailed quarterly figures next week on 23 April.

VW and Porsche strong

Sports car maker Porsche sold around a third more car in the first quarter of 2021 than in the same period last year. Between January and the end of March, 71,986 vehicles were handed over to customers – 36 per cent more than in the first quarter of 2020, the Volkswagen subsidiary announced in Stuttgart on Friday. In the previous year, the Corona pandemic, which began in mid-March, had slowed down Porsche and other carmakers in some cases.

For the year as a whole, Porsche sold just over 272,000 cars worldwide, slightly fewer than in 2019. Given the strong start to sales in the new year, the sports car maker can now hope to break the 300,000 vehicle sales mark for the first time. CEO Oliver Blume had already said in mid-March at the company’s annual press conference that there was “a legitimate chance” of this happening.

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In the first quarter, Porsche benefited from sales increases in all relevant world markets. The most substantial growth was in China, where almost 22,000 cars were sold. Compared to the same period last year, this corresponds to a substantial increase of 56 per cent. In the USA, sales increased by 45 per cent, in Europe by 16 per cent and in the home market Germany by 14 per cent.

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Via XETRA, the VW share climbed by 2.85 per cent to 245.05 euros.

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