An announced, huge economic stimulus program in Germany should not only benefit armaments companies but also help shares from the construction industry. Investors should in particular keep an eye on these titles.
• billion dollar investments in infrastructure and climate protection
• Profitors of the building offensive are companies
• Political hurdles still exist
After long discussions, the parliamentary tips of the Union, the SPD and the Greens have agreed to loosen the debt brake set in the constitution in order to raise defense spending. In addition, Germany is to receive a special fund of 500 billion euros that flows into the expansion of the infrastructure. 100 billion of them go to the countries. A further 100 billion is intended for printing of the Greens for climate protection and the climate -friendly conversion of the economy – this should be regulated via the existing climate and transformation fund. The special pot should be available for twelve years. Investors have already recognized that defense companies such as Rheinmetall, Renk or Hensoldt are obvious profiteers in the armaments segment, as a look at the extremely positive price development of companies in the course of the year shows. However, investors also have opportunities in the building segment.
Is there a flood of orders thanks to the construction boom?
Because in the infrastructure sector in particular, Germany has considerable catch -up potential. Deutsche Bahn has a massive renovation backlog. Tim-Oliver Müller, general manager of the main association of the German construction industry, commented on the status quo with the words: “The fact is: dilapidated bridges, streets, rails and waterways as well as management infrastructures in need of expansion endanger the competitiveness of the German economy. We have been pointing this out for years”.
Even if there is still a lack of details: Investors have long again targeted the construction industry against the background of the latest developments, which is reflected in sometimes clear course surcharges of the industry representatives. The hope of full order books and a construction boom inspired companies in the segment – and could ensure further upward potential for some stocks.
Heidelberg Materials share
For the Heidelberg Materials building materials group, it has gone significantly in the past four weeks: the share recently won around 12 percent, but the JPMorgan analyst Elodie Rall still sees further price potential and has raised the company’s price target from 164 to 200 euros. Also at the Swiss major bank UBS, one remains optimistic that Heidelberg could benefit from the planned expenses in the infrastructure area – analyst Gregor Kuglitsch has a “neutral” evaluation for the share certificate, but the price target is significantly above the current price level.
Vossloh
In the meantime, the rail technology company Vossloh should benefit from eliminating the renovation backlog at Deutsche Bahn. How strong, it could show a look at the annual balance sheet published on March 27th. In particular, the company’s outlook will then be under observation, because new major orders from the federal government for the modernization of the rail infrastructure will probably bring full order books.
In addition, Vossloh also has more iron in the fire. Investments in the USA and China and the special fund planned in Germany could continue to drive the demand and promote further order incoming, writes DZ Bank.
Wacker Neuson
In a first reaction, the Wacker Neuson share had also positively responded to the announcement of the billion -dollar special fund. Investors thankfully took note of the news, after all, things were going well as the construction machine manufacturer. The company had forced a blue to adapt the forecast, and many employees were sent in short -time work. The doldrums have been overcome for the time being, as sustainable, but still remains open. Orders on the government side could ensure a clearer stabilization of the stock.
High
One of the most obvious profiteers of the federal infrastructure offensive is the Bauriese Hochtief. With the figures for 2024, the company was able to exceed the market expectations, and the optimistic forecast for the current financial year was also well received. Possible additional positive effects from the special fund have not yet been included in the optimistic outlook.
Last hurdle Bundestag and Federal Council
Even if construction stocks and also titles from the Green Energy sector already put into the investor focus, the courses could also run in the other direction. Because the billion -dollar program still has to be done by the Bundestag and the Federal Council. On Tuesday, the Bundestag is initially on: the majorities for this are less secure than usual because many MPs from the Union, SPD and Greens leave the Bundestag and could therefore feel less bound by the usual faction discipline, as dpa-AFX emphasized. The Federal Council could then decide on Friday – here too, a two -thirds majority is necessary for a decision. This is also not yet certain, since countries can only agree if their government coalitions have found a common line.
Editor finance.net
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