These 5 DAX index companies are in trouble as their stocks plunge

German stocks are not doing well as the economy goes through substantial challenges. The most recent data showed that business confidence has tumbled while manufacturing and services PMIs have remained below 50.

Additional data revealed that the country’s economy contracted in the third quarter, moving it into a recession. This makes it one of the worst-performing major economies in the world. 

The crucial automobile sector is also facing numerous headwinds as Chinese companies continue take over. As a result, the DAX index has pulled back from last year’s high of €16,524 to the current €15,100. These are some of the top underwhelming DAX index components.

Bayer

Bayer (ETR: BAYN) is one of the worst-performing companies in the DAX index. The shares plunged to a low of €40.37 on Wednesday, 36% below the highest point this year and 58% from its highest level in June 2017. 

Bayer’s challenges came from its $68 billion acquisition of Monsanto, which led to major liabilities. Since then, its financial results have been quite weak. On Wednesday, the company said that its sales dropped to €10.8 billion while its EBITDA fell by 31% to €1.8 billion.

Now, the company is considering spinning off its consumer health business. This is in line with what other companies like Johsnon & Johnson and AstraZeneca have done. Activists want it to move from crop science altogether. In a statement, the CEO said:

“We’re not happy with this year’s performance. Nearly 50 billion euros in revenue but zero cash flow is simply not acceptable. Our mission hasn’t always been front and center in our operations. That will change. We are redesigning Bayer to focus only on what’s essential for our mission – and getting rid of everything else.”

Siemens Energy

Siemens Energy is another struggling DAX index component. As we wrote recently, the company requested over 16 billion euros in guarantees from the government. It had recently warned that it would lose billions of dollars this year.

Siemens Energy’s business is struggling as demand for wind projects wanes. It has also been forced to do repairs for selling faulty wind turbines. Most recently, several companies like Orsted have been forced to abandon their wind projects.

As a result, Siemens Energy share price has collapsed by almost 50% this year, making it the worst-performing companies in the DAX index.

Sartorius 

Sartorius, one of the biggest pharmaceutical companies in Germany, is also not doing well. Its stock has underperformed the other global pharmaceutical companies. It has dropped by 20% this month and by over 38% in 2023.

The company has blamed its performance to the soft customer demand across all its segments. Total sales in the first nine months of the year dropped by 16.4% to 2.5 billion euros. Its underlying EBITDA dropped by 30% to 733 million euros while margin fell to 28.8%.

Sartorius also blamed the performance to the Bioprocess Solution division, where its revenue dropped by 17.7% to 1.99 billion euros.

Daimer and Mercedes

The other top DAX index companies that are not doing well are in the automotive industry. Daimler and Mercedes Benz share prices have dropped by over 10% in the past month. Volkswagen and BMW have also underperformed the market in the past few months.

German automakers are facing major headwinds as high interest rates lead to lower sales. And most importantly, these companies are going through challenges as competition from Chinese brands like Nio, XPeng, and Li Auto. As a result, the European Commission has launched an investigation into China’s subsidies.