Deutsche Wohnen
DWNI
Delayed Frankfurt - 07/20 05:35:54 pm
41.38EUR
+0.02%

The medium term resistance level limits the upside potential

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Ulrich Ebensperger
Financial Analyst

Strategy published on : 07/10/2018 | 06:35

short sell
Stop-loss triggered

Entry price : 41.29€
Target : 38€
Stop-loss : 41.71€
Potential : 7.97%

Deutsche Wohnen shares trade close to a major resistance zone that is situated around 37.6 EUR. This zone should be difficult to break through, which in turn suggests a corrective move ahead.
Investors should open a short trade and target the € 38.

Strengths

● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.

● Its low valuation, with P/E ratio at 9.81 and 12.45 for the ongoing fiscal year and 2019 respectively, makes the stock pretty attractive with regard to earnings multiples.

● Over the last twelve months, the sales forecast has been frequently revised upwards.

● For the last few months, EPS revisions have remained quite promising. Analysts now anticipate higher profitability levels than before.

● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.

● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 37.21 EUR


Weaknesses

● Stock prices approach a strong long-term resistance in weekly data at EUR 41.5.

● The stock is currently in contact with a medium-term resistance that must be gotten rid of so as to resume the upward trend.

● The company is in a hindered financial situation with significant debt and rather low EBITDA levels.

● Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.

● Based on current prices, the company has particularly high valuation levels.

● For the past seven days, analysts have been lowering their EPS expectations for the company.

Zonebourse.com 2018
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