CAPTION: German arms maker Rheinmetall gets DAX boost with over 5% gain. (picture alliance/Rupert Oberhäuser)
Shares in German armaments maker and engineering company Rheinmetall attracted investors in droves after having been included in the DAX index of 40 leading stocks on the Frankfurt Stock Exchange.
At the close of the first day of trading in the DAX, Rheinmetall's shares topped the German benchmark index with a price gain of 5.4% to €249.90 ($267.95).
In entering the DAX, Rheinmetall pushed out dialysis specialist Fresenius Medical Care (FMC), who were downgraded to the MDAX index of medium-sized stocks.
The arms company's boost into the DAX index led to new forecasts and buying recommendations being drawn up by analysts.
The increasing demand for military equipment as well as rising defence spending in Germany and other NATO countries hold attractive medium-term potential for the company, said analyst Holger Schmidt from DZ Bank.
He called the company's outlook for 2023 conservative and sees room for improvement in his estimates as soon as the planned acquisition of the Spanish ammunition manufacturer Expal Systems is approved.
Analyst David Perry of US bank JPMorgan meanwhile raised his price target for Rheinmetall from €265 to €310. Perry said Rheinmetall is likely to be the main beneficiary of the significant ammunition deliveries to Ukraine.
The company's entry in the DAX index should also give its share price a boost, as it would make the stock more interesting for certain investors again.
With a price jump of around 32% this year, Rheinmetall shares are so far the best DAX stock of 2023.
Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.
A single purchase
