Analyst Downgrades Weigh on Knorr-Bremse Shares
The shares of brake manufacturer Knorr-Bremse are currently under pressure after two major investment banks, Citigroup and JPMorgan, significantly reduced their analyst ratings.
Reasons for the Downgrades
Citigroup has downgraded its recommendation for Knorr-Bremse from “Buy” to “Neutral” and reduced the price target from 97 euros to 92 euros. The main reason is concerns about the U.S. truck market, particularly weak order intakes for Class 8 U.S. trucks. Citi does not expect a recovery in the truck segment in the second half of 2025. Additionally, Citi predicts a decline in adjusted EBIT in the mid-single-digit percentage range for 2025 and warns of a negative risk-reward ratio for the stock in the coming months. The positive effects from cost savings are not expected to be visible until 2026.
JPMorgan has downgraded its rating from “Overweight” to “Neutral,” despite maintaining the price target of 93 euros. The bank justifies this by the strong performance of the stock so far this year, indicating that there is little upside potential in the short term. For the second half of the year, JPMorgan does not expect any significant new impulses or developments that could drive the stock price further.
Impact on Investors and Stock Development
These downgrades by renowned analysts can particularly concern investors in the German-speaking region, as such evaluations often have a direct impact on the stock development of DAX companies like Knorr-Bremse.
Despite these assessments, the Knorr-Bremse share has been in a long-term upward trend since April 2025, gaining approximately +12.93% in value by the end of June and recently crossing its important technical mark (100-day line). Nevertheless, increased volatility is likely in the short term due to analysts’ concerns.
Summary
- Citigroup lowers recommendation due to weak U.S. truck market from Buy to Neutral; EBIT decline expected.
- JPMorgan reduces rating due to already strong performance; sees little further price potential in the short term.
- Both evaluations significantly lower expectations.
- This currently weighs on the stock price despite a longer-term upward trend.
- Investors should be cautious and consider potential market risks.
Overall, these developments reflect a cautious stance of major banks towards the growth potential of Knorr-Bremse and could lead to a sustained burden on the stock.