123fahrschule SE (123fs) held a press event and an investor roundtable yesterday. mwb research’s analyst had the opportunity to discuss the latest developments at 123fs with CEO Polenske and he also had the chance to test the 123fs driving school simulators and gained some impressive insights. With the use of e-learning and in-house developed simulators, 123fs is in an excellent position to benefit from the upcoming market changes and the long-term assumptions largely reflect this solid growth potential. After yesterday's meeting, mwb research reiterates the BUY rating with an unchanged price target of EUR 6.20. The full update can be downloaded under https://www.research-hub.de/companies/research/123fahrschule%20SE

Lanxess reported a strong Q4, with pre-exceptionals EBITDA reaching EUR 159m, beating consensus by 22%, and FY24 EBITDA hitting EUR 614m, the upper end of its 10-20% growth guidance, driven by robust U.S. volume growth in Specialty Additives and Consumer Protection. Nevertheless, this performance was bolstered by pull-forward demand, likely triggered by price uncertainty stemming from the new U.S government. This early purchasing may create a demand vacuum in early 2025, potentially depressing short-term performance. Additionally, management has signaled no recovery in key markets heading into 2025. Despite this, Lanxess reduced net financial debt by EUR 100m, reflecting prudent financial management. As a leader in niche specialty chemicals, mwb research’s analysts believe the company is well-positioned to leverage future demand acceleration, particularly with its ongoing transformation to an asset-light, high-margin business model. Against this backdrop, the analysts adjust their estimates slightly and remain conservative for 2025 with no material impact on valuation. mwb research reiterates the BUY rating with an unchanged PT of EUR 30.00, emphasizing its long-term potential despite near-term challenges. The full update can be downloaded under https://www.research-hub.de/companies/Lanxess%20AG

Interest in German real estate stocks has been rather low recently, but mwb research’s analysts see potential for a turnaround, particularly in FCR Immobilien. The improved interest rate environment, with ECB rate cuts and possible further easing in 2025, could provide a tailwind for the real estate sector. After two years of declining FFOs, FCR could be poised for a recovery, driven by more stable financing costs, further portfolio expansion and index-linked rentals. In the view of mwb research’s analysts, the niche of local retail properties in secondary German locations with high initial yields and stable rents remains very attractive. Nevertheless, the stock is currently trading at around 30% below NAV, which the analysts believe offers significant upside potential. mwb research therefore reiterates the BUY rating with an unchanged price target of EUR 20.50. mwb research is organizing a virtual roadshow with CFO Christoph Schillmaier on 11 February. Interested investors can send an email to feedback@mwb-research.com. The previous full update can be downloaded under https://www.research-hub.de/companies/FCR%20Immobilien%20AG

MS Industrie recently decided to focus on its core business by selling 51% of its subsidiary MS Ultraschall in mid-24. The move will allow the company to focus on its highly automated MS XTEC division, which produces mechanical parts and systems as a single-source, first-tier supplier primarily for the heavy-duty truck market. MS XTEC's products are known for their high quality, consistency and long-life cycles. The company has long-term contracts with major customers, including Daimler Trucks and Traton, that specify planned annual purchase volumes. Despite the current downturn in the European truck market, growth is expected as demand picks up. The company's low future CAPEX requirements, long-term contracts and low price-to-book ratio of 0.5x make the stock an attractive investment. mwb research’s analysts initiate their coverage of MS Industrie with a BUY rating and a PT of 2.40, offering an upside of 75.2%. The full update can be downloaded under https://research-hub.de/companies/ms-industrie-ag

HWK 1365 SE (HWK) has announced that two board members, Frank Günther and Wolf Waschkuhn (also managing director of HWK), are in custody and under investigation on charges unrelated to HWK. The company's operations, which are managed by Hüttenwerke Königsbronn GmbH, remain unaffected as its managing director is not under investigation. The investigations could lead to prolonged uncertainty, potentially necessitating interim management changes. The situation is further complicated by the fact that Frank Günther and Wolf Waschkuhn directly or indirectly control approximately two-thirds of the share capital of HWK. Until the impact of the investigations on HWK become clearer, mwb research’s analysts put their rating under review and suspend their price target. The full update can be downloaded under https://www.research-hub.de/companies/HWK%201365%20SE

Nemetschek (NEM) reported strong preliminary FY24 results, with revenues growing 17% yoy to EUR 996m, driven by organic growth of 14% and contributions from GoCanvas (+3pp). Exceptional performance in the Design and Build segments, fueled by the subscription transition and final sales of perpetual licenses, boosted Q4 revenues to EUR 291m (+33% yoy mwb est.). Preliminary EBITDA margins exceeded the upper end of guidance, showcasing robust operational execution. The shift to SaaS and recurring revenues continues to solidify Nemetschek’s position, with ARR growing over 40% yoy and recurring revenues contributing 86% to the total. Mwb research raises the PT to EUR 110.00 (from EUR 96.00) but maintains our HOLD rating. The full update can be downloaded under https://www.research-hub.de/companies/research/Nemetschek%20SE

TUI's long-term corporate credit ratings from Moody's and S&P are expected to be reviewed in February, with a good chance of an upgrade given the positive outlooks both agencies have given after raising the ratings last year (S&P to B+ and Moody's to B1). Indicators supporting an upgrade include TUI's strong FY24 performance with EBIT growth of 28%, significant debt reduction (EUR 2.1bn to EUR 1.6bn), improved net leverage (0.8x in FY24 vs. 1.2x in FY23) and progress on mid-term targets. These achievements, together with positive FY25 guidance and robust bookings, suggest that TUI is overcoming pandemic challenges and moving towards its target rating range (BB/Ba). An upgrade would boost equity confidence and confirm TUI's recovery. mwb research’s analysts reiterate their BUY recommendation with a price target of EUR 16.00. The full update can be downloaded under https://www.research-hub.de/companies/TUI%20AG

Infineon’s Q1 2025 results, due on February 4th, are expected to highlight a subdued start, with consensus sales at EUR 3.27bn, reflecting steep declines of -16.8% qoq and -11.8% yoy, alongside a segment margin contraction to 15% (-6.5pp qoq, -3.5pp yoy). These results, while in line with guidance, underscore industry-wide pressures such as shrinking light vehicle production, stagnant xEV adoption outside China, weak industrial and consumer demand, and persistent inventory overhangs. The FY25 guidance implies gradual improvement throughout the year, though not enough to reverse a yoy decline, marking the second consecutive year of contraction since the 2023 peak. The steep drop in Infineon’s order backlog—now EUR 19bn, down from EUR 43bn nine quarters ago—warrants close monitoring. Q1 targets appear achievable due to their already depressed levels, but a clear upward trajectory from Q2 is vital to sustain investor confidence and prevent a stock sell-off. As for now, mwb research’s analysts maintain their BUY rating with a PT of EUR 37.00 as long-term growth drivers remain intact. The full update can be downloaded under https://www.research-hub.de/companies/Infineon%20Technologies%20AG

LM Pay S.A. continued its robust growth trajectory, driven by an expanding customer base and strengthened partnerships with healthcare providers. The company's ability to deliver recurring revenue streams from medical and aesthetic services has further solidified its market position. LM Pay is strategically positioned for continued growth with plans to expand its clinic network and introduce new financial products. The company's ability to secure a leading position in the embedded healthcare financing market in Poland, coupled with its scalable business model and strategic growth initiatives, underpins the confidence in its long-term potential. mwb research will host a virtual investor roundtable with CEO Jakub Czarzasty on January 22 at 14:00 CET (register here). Mwb research reiterates the BUY rating with unchanged PT of EUR 63.00, which represents an upside of around 67%. The full update can be downloaded under https://www.research-hub.de/companies/LM%20Pay%20S.A.

Is the Defense Supercycle Ending by 2030? This question frequently arises in meetings with investors, reflecting concerns about long-term growth. Current consensus estimates a P/E of 13 for 2027, despite Rheinmetall's robust growth potential extending well beyond that year. The company is uniquely positioned to benefit from a structural shift in defense spending, driven by NATO standards that will take decades to meet. For example, the European need for 155mm artillery shells far outstrips current production capabilities, with a conservative estimate of EUR 108bn required to meet just 30 days of ammunition stock. At Rheinmetall’s planned production capacity of 1.1m shells per year by 2027, fulfilling this demand would take more than 30 years, underscoring the company’s critical role in addressing this persistent gap. Beyond artillery, Rheinmetall's growth is supported by undervalued opportunities in air defense systems and battlefield digitalization. With an order backlog exceeding six times its 2024 revenues, market leadership, and increasing production capacity, Rheinmetall is well-positioned for sustained growth. mwb research’s analysts reiterate their BUY rating and raise their price target to EUR 800.00 (previously EUR 750.00), reflecting stronger post-2030 revenue expectations. The full update can be downloaded under https://www.research-hub.de/companies/Rheinmetall%20AG