37 percent protection: Daimler truck with a 16 percent chance

Daimler truck shares have been on a strong upward trend since the beginning of October.

37 percent protection: Daimler truck with a 16 percent chance

Daimler truck shares have been on a strong upward trend since the beginning of October. With bonus certificates with a cap, investors can also generate high returns if the positive price development of the share does not continue.

Daimler Truck shares have been on an upward trend for weeks, during which they rose by 38.62 percent from October 3, 2022 from EUR 22.84 to December 1, 2022 to EUR 31.66. The increases in sales and earnings for the third quarter achieved despite the falling order intake and the confirmation of the outlook could also support the share price in the future.

In anticipation of lower fluctuations in raw material prices and a stabilization of the supply chains, which should strengthen the earning power of the automotive industry, the experts at JP Morgan Chase reiterated their buy recommendation for Daimler Truck shares with a price target of EUR 48.

The investment idea

Investors who are now considering an investment in the Daimler Truck share, which is classified as greatly undervalued, and at the same time want to reduce the price risk of a direct share investment, could consider buying a bonus certificate with a cap as an alternative to a direct share investment. With such products, investors can achieve returns in the double-digit percentage range over the next twelve months with a significantly reduced risk of loss.

Compared to direct share purchases, bonus certificates with a cap offer investors the advantage that they enable high returns even when share prices are stagnating or falling. As a counter-trade for the attractive sideways opportunities, certificate investors have to forego the unlimited profit potential of equity investments and prospective dividend payments.

The way it works

If the Daimler Truck share never touches or falls below the barrier of EUR 20.50 by the valuation date of the certificate, then the bonus certificate with cap will be repaid on December 22, 2023 with the bonus level of EUR 35.50.

The key data

In the case of the DZ Bank bonus certificate with a cap on the Daimler Truck share (ISIN: DE000DW77AJ2), the bonus level and cap are EUR 35.50. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 15, 2023, is EUR 20.50. At the Daimler Truck share price of EUR 30.64, investors could buy the certificate for EUR 30.70.

The chance

Since investors can currently purchase the certificate for EUR 30.70, it enables a gross return of 16.29 percent in twelve months if the share price never falls by 40.40 percent to EUR 33.09 or below by the valuation date.

The Risks

If the Daimler Truck share touches the barrier of EUR 20.50 by the valuation date and the share is listed below the cap on the valuation date, the certificate is redeemed at the closing price of the Daimler Truck share determined on the valuation date. If this is fixed below EUR 30.70, then the certificate investment will cause a loss.

This article does not constitute a recommendation to buy or sell Daimler Truck shares or investment products based on Daimler Truck shares. No liability is assumed for the correctness of the data.