On Wednesday, Deutsche Bank resumed coverage on Vitesco Technologies Group (VTSC:GR) (OTC: VTSCY) stock, issuing a Buy rating and setting a price target of EUR102.60.
The bank's analysis points to Vitesco's position as a prominent player in the powertrain electrification market, which is expected to significantly expand its electrification business and potentially reach a break-even point within the 2024/2025 timeframe.
The bank's recommendation reflects confidence in the company's comprehensive order book, which is believed to provide a measure of security against trends in model lines that are performing below expectations.
The transition to electric vehicles (EVs) has experienced some deceleration, but Vitesco's diverse portfolio is seen as a protective buffer against these headwinds.
Deutsche Bank's price target for Vitesco is intricately linked to the company's relationship with Schaeffler, as the target is derived from the exchange ratio to Schaeffler shares coupled with Deutsche Bank's target price for Schaeffler. The bank anticipates that the combined entity of Schaeffler and Vitesco harbors upside potential.
The analyst's statement underscores the strategic rationale behind the rating, "We resume coverage on Vitesco with a Buy recommendation and a target price of EUR102.6, which is derived from the exchange ratio to Schaeffler shares and our target price for Schaeffler."
Furthermore, the bank's stance is bolstered by the expectation that Vitesco's broad order book should act as a relative hedge to model lines that are trending below budget.
Deutsche Bank's outlook for Vitesco is optimistic, with the company's shares planned to be exchanged for Schaeffler shares, reinforcing the Buy rating.
The bank's analysis suggests that investors could potentially benefit from the synergies of the Schaeffler and Vitesco alliance.
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