Warburg analyst Marc-Rene Tonn downgraded the share from “Hold” to “Sell” on Wednesday, even though he raised the target price from EUR 8.00 to EUR 12.50. The shares were currently quoted at EUR 14.66.
In his study, Tonn clouded the imagination for business with fuel cells – a trend topic that has recently been much discussed and popular with speculators on the stock exchanges. The expert considers the hope that investors at Elringklinger recently put in hydrogen technology to be exaggerated. Meanwhile, he believes that the traditional business with seals for internal combustion engines will face falling demand.
As Tonn continues, the hymns of praise for green hydrogen as the fuel of the future are premature. Even though technology is an important pillar in reducing CO2 emissions, he believes that demand will only pick up momentum towards the end of the decade. Over such a period of time it is hardly possible to predict market developments and the influence of alternative technologies sensibly.
Another strong price jump the day before was undone by the price slide on Wednesday. The share certificates had temporarily increased in double digits on Tuesday and were traded above 17 euros for the first time since February 2018. Previously, JPMorgan’s Jose Asumendi, an influential and so far consistently pessimistic analyst, upgraded the stock to at least a neutral vote despite its good run.
In its sector study, Asumendi had predicted a strong year for the automotive industry in 2021 – and showed a preference for companies with a lead in the field of new technologies, among other things. At Elringklinger he argued more positively than before that the “hype about hydrogen and fuel cells hides other weaknesses in the business model.”
The good run of the past months will now come to an abrupt end on Wednesday. Since the Corona crash in March, shares had shot up five times and since the beginning of October by more than 160 percent. They had thus clearly isolated themselves from the overall market and the automotive sector: The SDax and the Stoxx Europe 600 Automobiles & Parts gained around 20 percent in the final quarter.
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