(new: Jefferies and JPMorgan studies, further details, current share price)

FRANKFURT (dpa-AFX) - Deutsche Borse raised its 2023 forecast for the third time this year, as expected, following continued strong business, high interest rates and the Simcorp acquisition. An increase of approximately 15 percent to around five billion euros is targeted for net proceeds, the company announced on Wednesday evening after the close of trading in Frankfurt. Group CEO Theodor Weimer had previously forecast an increase of at least eight percent to more than 4.7 billion euros.

The target for earnings before interest, taxes, depreciation and amortization (Ebitda) was raised from more than 2.8 billion euros to around 2.9 billion euros. Experts had expected an increase of this magnitude. The share, which is listed on Germany's leading Dax index, initially rose after the announcement, but gave back most of the gains.

The reason for the significant increase in the earnings target is the contribution from the Danish software provider Simcorp, whose acquisition was recently completed, strong structural growth and higher interest income. The bar for profit, on the other hand, has not been raised as much, as the updated forecast includes costs for the acquisition and special charges to leverage synergy potential.

The forecast for the profit is in line with the previous average estimate of experts surveyed by Bloomberg. In terms of the profit target, Deutsche Borse is in line with expectations. However, not all analysts had yet factored the impact of the Simcorp acquisition into their estimates.

In the third quarter, revenue increased by nine percent to 1.19 billion euros. Earnings before interest, taxes, depreciation and amortization rose by seven percent to 685 million euros - excluding special items, they would have climbed by 13 percent. Deutsche Borse put the cost of the Simcorp transaction, the most expensive acquisition in the company's history at 3.9 billion euros, at 18 million euros.

A further 19 million euros was spent on costs to leverage synergy potential in the newly created Investment Management Solutions segment. "In this segment, we will report on the activities of Simcorp as well as the previous Data & Analytics segment from the fourth quarter."

The company wants to use the Danish software provider to strengthen its data business and make itself less dependent on fluctuations in the financial markets. Weimer had said at the end of June that he saw the Simcorp acquisition as the last major deal of his term, which ends at the end of 2024. The Dax group is unlikely to implement further billion-euro transactions in the next year and a half.

On balance, the Group earned 400 million euros in the third quarter, around seven percent more than a year ago. Earnings were thus broadly in line with expectations. In terms of operating profit, analysts on average were expecting somewhat more; however, not all of them probably had the special items for the acquisition and integration of Simcorp on their minds.

In the evening, shortly after the announcement of the outlook figures on the Tradegate trading platform, the share price initially rose by up to 2.4 percent compared with the Xetra closing price to almost 161 euros. As the evening progressed, the share gave up almost all of its gains and was last at 158 euros, only half a percent above the close of the main trading session.

The Deutsche Borse share has been under pressure in recent weeks and months. Since its previous record high of just over 186 euros in April of this year, it has fallen by around 15 percent. In contrast to previous years, the share has been one of the losers in the Dax so far this year, with a slight decline. The situation is different in the medium term.

Since Weimer took office at the beginning of 2018, the company's borse value has risen by just over 60 percent to almost 30 billion euros. This puts Deutsche Borse among the 10 best performers of the 40 Dax stocks over this period. For JPMorgan expert Enrico Bolzoni, neither the third-quarter figures nor the outlook delivered any major surprises. As the reported operating result was below expectations, the share price initially reacted with price losses on Thursday.

In an initial assessment, Bolzoni confirmed its rating for the share at "Neutral" with a price target of 183 euros. Jefferies analyst Tom Mills was also not surprised by the figures and the outlook all in all. He confirmed his "Hold" recommendation. He set the price target at 190 euros. The JPMorgan analyst hopes that the Capital Markets Day on November 7 will provide statements on the targets for the coming year and beyond.

After the presentation of the figures for the third quarter, Weimer confirmed the previous targets from the Simcorp acquisition. Accordingly, the Danish software company is expected to contribute 600 million euros to revenue in the coming year. The contribution to earnings is expected to be around 200 million euros - although this does not yet include the synergy effects hoped for from the integration.

For Jefferies expert Mills, the further development of the share also depends on how investors will receive the targets presented at the Capital Markets Day. He said the market would probably first have to be convinced that the new targets were credible, especially because part of them would apply to a period for which Weimer was no longer responsible. The former HVB chief executive's contract expires at the end of 2024. Supervisory Board Chairman Martin Jetter is currently looking for a successor.

In recent years, Weimer has succeeded in steering Deutsche Borse back on a calmer course after the turbulent years under his predecessor Carsten Kengeter, while driving the operating business forward. Kengeter had been forced to leave at the end of 2017 after less than three years in office on suspicion of insider trading in connection with yet another failed attempt to merge with London Borse./zb/la/he