Defense Companies' Shares Gain on Germany's Military-Spending Hike
28 Février 2022 - 12:36PM
Dow Jones News
By Cecilia Butini
Shares in European defense companies have jumped in opening
trade on Monday after Chancellor Olaf Scholz's said at the weekend
that Germany would boost its military spending following Russia's
invasion of Ukraine.
Analysts see the news as positive for defense companies not only
in terms of higher returns, but also as Germany's shift could pose
a chance to change investors' attitudes toward this type of
stock.
"We strongly believe that the threat of discrimination against
the defense sector as ESG-incompatible under the EU's planned
taxonomy for sustainable finance will no longer be on the table,"
Warburg analysts say.
The European Union has been discussing labeling defense
companies as "socially harmful" under its social taxonomy
plans--which look to classify which economic activities are
environmentally sustainable.
Looking at Germany's Rheinmetall AG, for example, Warburg sees
its stock with fresh upside potential, as it calculates that the
company could gain an additional EUR15 billion in revenue from
coming from new orders in its home country.
At 1040 GMT, shares in Rheinmetall shares were 32% higher at
EUR140.85.
Citi analysts see German company Hensoldt AG as the main
beneficiary of the chancellor's spending proposal, as the defense
company makes just over half of its sales in Germany and the
government's emphasis appears to be on land and air equipment.
At 1045 GMT, Hensoldt traded 51.4% higher at EUR22.45.
According to Berenberg analysts, Airbus SE, BAE Systems, MTU
Aero Engines AG and Dassault Aviation SA should also benefit from
Germany's policy shift.
At 1045 GMT, MTU Aero Engines shares were 4.4% higher at
EUR219.20 and Dassault Aviation traded 8.4% higher at
EUR134.90.
Write to Cecilia Butini at cecilia.butini@wsj.com
(END) Dow Jones Newswires
February 28, 2022 06:21 ET (11:21 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
Dassault Aviation (EU:AM)
Graphique Historique de l'Action
De Fév 2024 à Mar 2024
Dassault Aviation (EU:AM)
Graphique Historique de l'Action
De Mar 2023 à Mar 2024