Deutsche Bank Upgrade of Vonovia SE
Deutsche Bank on Thursday upgraded German residential landlord Vonovia SE from “hold” to “buy” and increased its price target to €26, up from the previous €25. Analyst Thomas Rothaeusler explained that European real‑estate performance remained weak in the first half of the year, pushing sentiment, positioning and valuation to trough levels, but he sees more upside than downside because higher‑rate expectations are largely priced in. Rothaeusler added that the broker is shifting its stance from growth‑oriented to value‑oriented and is turning positive on defensive residential assets, placing Vonovia alongside Merlin Properties and VGP as Deutsche Bank’s three top picks in the sector.
The upgrade is issued against a cautious macro backdrop. Deutsche Bank characterises the European outlook as “more in the recession camp” and regards the energy‑price shock stemming from the Middle‑East conflict as temporary, whereas the broader economic impact is expected to be longer‑term. In line with this view the bank trimmed price targets for several names and adopted a slightly more cautious stance on commercial real estate. Conversely, it identified good re‑rating potential in the logistics segment, citing attractive stock valuations and a supportive bid for Segro.