RWE's shares surge following a deal announcement, while Deutsche Telekom faces stress due to recent developments

German Stock Market Highlights

The German stock market saw a mixed performance on Monday, with some stocks experiencing significant gains while others faced losses. Here are the key developments:

Conflict of Interest Disclosure: The management and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Föst, has entered into direct and indirect positions in Commerzbank and Deutsche Telekom, financial instruments that could potentially benefit from the potential price development resulting from the publication.
Stock Market Movements: The MDAX rose by 1.48 percent to 30,455 points, with HelloFresh leading the losers with a decline of 1.8 percent. Renk gained 4.1 percent in the MDAX, and Kontron's stock rose by 3.9 percent, contributing to the index's growth. In the DAX, Commerzbank gained 3.1 percent, and Rheinmetall rose by 2.7 percent, becoming one of the best performers.
Individual Company Performance: Zalando, the DAX leader, gained 5 percent in its recent price recovery, following the news of RBC seeing significant upside potential for Zalando's stock, with a price target more than 40 percent above its current valuation. RBC's positive review on Zalando was not the only positive news for a German company, as analysts also view the RWE deal as attractive. RWE, whose status in the article is not specified, has completed a deal and brought its 25.1 percent stake in the grid operator Amprion into a newly formed joint venture.
Mergers and Acquisitions: SpaceX is buying a billion-dollar package of mobile frequencies from Echostar, which could potentially lead to greater independence for T-Mobile US. This news did not seem to affect Deutsche Telekom significantly, although its decline was due to pressure on its US subsidiary T-Mobile US in New York.
Defense Stocks: Experts continue to see good business prospects for defense stocks due to ongoing conflicts in Ukraine and the Middle East. Hensoldt added 2.5 percent, reflecting this trend.
Long-Term Outlook: In the long term, analysts remain optimistic about Deutsche Börse, which continues to trade near its 52-week high and expects earnings growth in 2025. The DAX index has already climbed by over 18% year-to-date, indicating strong medium-term prospects for many German blue chips despite recent volatility.
Investor Interest: Investors are buying Commerzbank at lower price levels, betting on a potential takeover by Italy's Unicredit. Meanwhile, Kontron is exempt from US import tariffs, which could positively impact its future performance.
Management Changes: Co-founder Thomas Griesel will leave the management board of HelloFresh by the end of April 2026. This means that changes in the management board of HelloFresh will continue.
Disclosure: The author holds direct positions in Zalando and Rheinmetall.