Grenke Lowers 2024 Guidance Due to Economic Forecasts

Shares in Grenke, the German leasing company, experienced a decline after the company revised its guidance for 2024. The adjustment was made in consideration of updated economic forecasts and a steadfast focus on balanced profitability.

As of 0753 GMT, shares were down by 8% at EUR24.10.

Grenke now projects its new leasing business for 2024 to fall within the range of 3 billion euros and 3.2 billion euros ($3.29 billion-$3.51 billion), compared to the previous outlook of EUR3.4 billion.

The company also lowered its estimated net profit range for next year to between EUR95 million and EUR115 million, down from the prior forecast of approximately EUR120 million.

While Grenke's second-quarter results exceeded expectations thanks to better-than-anticipated risk provisioning, the downward revision for 2024 guidance is expected to overshadow these positive outcomes and result in a negative reaction in the stock market, according to Deutsche Bank analyst Mengxian Sun.

Deutsche Bank highlighted that the previous consensus already aligned with the upper end of the revised guidance range. Consequently, a mid-single-digit earnings-per-share revision is anticipated.

In the second quarter of 2023, Grenke reported a net profit of EUR25.5 million, up from EUR21.7 million during the same period in the previous year.

The company has maintained its outlook for the current year, anticipating new leasing business between EUR2.6 billion and EUR2.8 billion, with a projected net profit ranging from EUR80 million to EUR90 million.