SIXGF - Sixt SE is tipped by Deutsche Bank to see near-term rally

Deutsche Bank issued a catalyst call buy idea on Sixt SE ( OTC:SIXGF )

Analyst Michael Kuhn said sentiment for the European travel & leisure sector has clearly improved over recent weeks with a deep recession in Europe not considered a core scenario anymore. He also noted that investors are focusing on stocks that have underperformed during 2022.

"More importantly, fundamentals also remain favorable for the car rental sector: DB forecasts only a modest recovery for European car production and registrations in 2023, and registrations in Western Europe fell short of the replacement demand by more than 3m units p.a. over the last three years. As a consequence, car availability remains limited, helping capacity discipline in the rental car market. At the same time, tour operators and airlines continue to comment very positively on demand."

Looking ahead, the firm sees a positive supply-demand balance and solid pricing. A positive trading environment is expected to be supportive for the sector news flow, for travel & leisure as a whole and for the car rental space specifically. Finally, valuation on Sixt is called attractive accordingly even factoring in an earnings decline.

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