Introduction

Deutsche Bank has made significant adjustments to the price targets of European stocks ahead of the upcoming earnings season. The bank has lowered price targets on nearly 30 European stocks and upgraded just one to a “buy” rating.

Major Changes in Price Targets

One of the most notable price target cuts was for Denmark’s energy giant, Orsted. Deutsche Bank analysts reduced their 12-month share price forecast by 36% to 450 Danish krone ($64) on October 16th. Orsted’s stock has experienced a significant decline this year, nearly halving in value and currently trading around 320 krone.

The analysts had previously identified challenges in the wind turbine industry, where Orsted is a key player. These challenges include supplier delays, lower tax credits, and rising rates. Additionally, Orsted’s shares suffered after the company hinted at a potential 2.1 billion euro ($2.22 billion) impairment charge in its U.S. offshore wind portfolio.

Top Stocks with Price Target Cuts

According to Deutsche Bank’s note on October 16th, the following table displays the top 10 stocks out of 28 with the largest reductions in price targets:

• Swiss construction chemicals maker Sika – 4% reduction
• Online food delivery companies Delivery Hero and Just Eat Takeaway.com – 5.7% and 11% reductions, respectively
• Italian lenders – price target cuts due to rising rates
• Fineco Bank – downgraded to hold due to negative impact on share price performance

Positive Outlook for European Utility Sector

Despite the price target cuts, Deutsche Bank remains optimistic about the European utility sector. The bank believes that investors are overestimating the impact of rising bond yields and becoming overly pessimistic about the renewable energy outlook. Deutsche Bank analysts recommend integrated utilities such as RWE, Enel, SSE, and E.ON, maintaining “buy” ratings on these stocks while lowering their price targets by 2% and 12%.

The Only Upgrade

Deutsche Bank analysts upgraded their rating on Italian natural gas company Italgas to “buy” while reducing its price target by 5%.