The DAX Index has been trading in a narrow band over the past few sessions, with investors digesting the European Central Bank's latest policy decision and a wave of corporate results from Deutsche Bank, BASF, Mercedes-Benz, Linde, and Adidas. As the earnings season continues, attention now shifts to a fresh set of blue-chip reports that could set the tone for German equities in the coming week.
Bayer earnings to test post-Roundup momentum
Bayer's shares have climbed more than 50% from their 2024 low, supported by a string of legal victories in the ongoing Roundup litigation. The company recently won another jury trial, following a Supreme Court ruling in its favor earlier this year. However, a separate court is still weighing a proposed $7.25 billion settlement covering other Roundup claims, leaving a key overhang unresolved.
In its most recent quarterly report, Bayer posted a 3% increase in sales to €24.3 billion, with core earnings per share rising 3% to €3.6. The crop science division led the growth, with revenue up 5.5%, while pharmaceuticals and consumer health advanced 3.5% and 0.2%, respectively. The upcoming release will offer investors a clearer view on whether this momentum can be sustained.
BMW results to shed light on China and turnaround
BMW's stock has fallen sharply over the past year, trading around €57.92 on Friday, roughly half its 2024 peak of €115. The decline mirrors broader weakness across European automakers, including Volkswagen and Mercedes-Benz. Volkswagen's latest earnings showed its largest loss since the Dieselgate scandal, with management warning that thin margins are hampering investment in future technologies. Deliveries to China dropped 30% in the last quarter.
BMW's upcoming results will be closely watched for signs of stabilization, particularly in China, and for any updates on its cost-cutting and electrification strategy. The company's ability to navigate the industry downturn will be a key test for investors.
Rheinmetall under pressure amid defense sector headwinds
Rheinmetall, Europe's largest defense contractor, has seen its shares tumble from €2,005 in September to around €1,037, making it one of the DAX's worst performers this year. The sell-off intensified after Germany canceled a frigate program that was expected to generate billions in revenue. The company also faces supply chain disruptions and higher raw material costs linked to the ongoing US-Iran conflict.
The stock's decline has been in line with US peers like Lockheed Martin and RTX, as defense valuations cool after a strong run. Rheinmetall's earnings report will provide investors with an update on order intake, backlog, and margin trends.
Other DAX names to watch
Beyond these four, several other DAX companies will report next week, including Deutsche Telekom, Deutsche Post, Commerzbank, and Siemens Healthineers. Vonovia, the real estate giant, will also release results, with its business facing pressure from a new Berlin rent regulation law. These reports will offer a broader read on the German economy, from telecoms and logistics to banking and healthcare.
Investors will be looking for any guidance on 2025, especially amid persistent inflation, high interest rates, and geopolitical uncertainty. The DAX's recent rangebound trading suggests the market is waiting for clearer signals on corporate earnings and the ECB's next moves.
This article is for informational purposes only and does not constitute financial advice.
