LONDON, Dec 15 (Reuters) - After a stellar 2025, investors expect shares in European banks to keep heading higher in 2026, supported by strong earnings and, crucially, cost savings stemming from artificial intelligence. As fears of a recession and interest rate cuts from the European Central Bank have subsided, investors have turned ​even more positive towards European banks, revising up their expectations for the sector, despite a complicated backdrop. Meanwhile, AI has emerged as a new force drawing i ...

Core Viewpoint - Commerzbank AG has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Commerzbank indicate an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Commerzbank's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Commerzbank is expected to earn $2.71 per share, with no year-over-year change, while the Zacks Consensus Estimate has increased by 0.7% over the past three months [8].

Core Viewpoint - Commerzbank has revised its forecasts for base metal prices upward due to favorable recent momentum amid rising prices [1] Price Forecast Adjustments - Copper's average price is now expected to be $10,500 per ton by year-end, up from the previous estimate of $9,600 [1] - Aluminum's average price forecast has increased from $2,600 to $2,900 [1] - Zinc price forecast has been raised from $2,800 to $3,000 [1] Nickel Price Adjustment - Nickel price forecast has been lowered from $16,000 per ton to $15,000 due to slowing production growth and continued ample supply, leading to downward pressure on prices [1] Market Dynamics - After a brief decline earlier in the month, U.S. imported aluminum premiums have surged to record highs due to domestic shortages and a 50% tariff, alongside tightening global supply [1] - LME inventories have decreased since mid-October, indicating that the supply effects driven by tariffs may be diminishing, while a significant inventory increase at the end of October may be related to a trader's financial transaction replenishment [1]

Core Viewpoint - Commerzbank has revised its forecasts for base metal prices upward due to favorable recent momentum amid rising prices [1] Group 1: Price Forecast Adjustments - The average price forecast for copper has been increased to $10,500 per ton from the previous $9,600 [1] - The average price forecast for aluminum has been raised from $2,600 to $2,900 [1] - The zinc price forecast has been adjusted upward from $2,800 to $3,000 [1] Group 2: Market Dynamics - Current strong copper prices may be premature, leaving room for short-term corrections due to supply conditions [1] - Nickel price forecast has been lowered from $16,000 per ton to $15,000 due to slowing production growth and continued ample supply, leading to downward pressure on prices [1] Group 3: Supply and Demand Factors - U.S. imported aluminum premiums have surged to record highs due to domestic shortages and a 50% tariff, alongside tightening global supply [1] - LME inventories have declined since mid-October, indicating that the supply effects driven by tariffs may be diminishing, with a potential inventory increase at the end of October linked to a trader's financial transaction replenishment [1]

Group 1 - The company has undergone significant changes over the past year since the CFO's announcement and rejoining [1] - The current strategic focus of the company is characterized by a unified voice from management to employees [2]

Group 1 - The core viewpoint is that Commerzbank expects copper and aluminum prices to continue rising next year, reaching $12,000 and $3,200 per ton respectively [1] - Commerzbank forecasts zinc prices to be around $3,000 per ton next year [1] - The bank anticipates a moderate long-term increase in nickel prices, projecting a price of $16,000 per ton by the end of 2026 [1]

Market Trends & Global Economy - Asian stocks rebounded, tracking Wall Street's gains, with dip buyers capitalizing on tech weakness [1][7] - Uncertainty surrounds potential limits on President Trump's global tariff agenda by the U S Supreme Court [1][18] - The U S government shutdown, now at 37 days, is impacting flights and raising concerns about economic consequences [22][23][24] Bank of England (BOE) Rate Decision - The Bank of England is likely to hold interest rates steady at 4%, ending a series of quarterly reductions [11] - Analysts anticipate a split decision on rates, possibly 6-3, hinging on Governor Andrew Bailey's stance [12] - Focus is on how long the hold will last and how the Governor characterizes the 3 8% inflation rate [15] Commerzbank Performance & Strategy - Commerzbank's third-quarter revenue slightly missed estimates at 2 5 billion euros, but net interest income reached 8 2 billion euros [2][3] - The bank raised its outlook for full-year net income to approximately 2 5 billion euros [3] - Commerzbank is initiating a 600 million euro share buyback program and is open to discussing potential combinations with UniCredit, provided a formal proposal is presented [74][76] Zurich Insurance Financials - Zurich Insurance's gross written premiums in its Property and Casualty (P&C) unit increased by 8% to a record 39 billion in the first nine months of the year, while Life and Health premiums rose by 11% [28][30] - The company is confident in achieving its financial targets, including an EPS compound growth above 9% over the three-year period and an ROE illustrating above 23% [35][36] - Zurich Insurance remains strategically interested in offloading a $20 billion book, despite a previous deal falling through due to regulatory issues [40][42] Technology & AI - Pony AI CEO discussed the company's global footprint in robotaxi services, with a focus on regulatory progress in the Middle East, particularly the UAE [43][45] - Pony AI has deprioritized commercialization in the U S due to geopolitical concerns and data-related issues, pausing plans for now [46] - A German AI language platform, seen as a rival to Google Translate, has unveiled new AI tools for office efficiency and is considering a potential IPO [57][58][64] Other Company Earnings - Continental's third-quarter adjusted earnings decreased by 15% year-on-year to 555 million euros, with a softer margin story [51][52] - Rheinmetall, a key player in the defense sector, reported operating profit up almost 20% year-on-year to 835 million euros for the first nine months, confirming its 2025 outlook [52][54]

Core Insights - Commerzbank reported a net profit decline of 7.9% in the third quarter, contrary to expectations for profit growth [1] Company Summary - The decline in net profit comes amid efforts to fend off a potential takeover by Italy's UniCredit [1]

Commerzbank’s former CEO Manfred Knof had a private meeting with UniCredit CEO Andrea Orcel in September of last year, shortly after the Italian bank disclosed it had taken a stake in Commerzbank, sources say https://t.co/YwKutTBdBu ...

Core Viewpoint - The company is experiencing record performance and is optimistic about future growth, with a focus on shareholder returns and exceeding key performance indicators (KPIs) [1][4][22] Financial Performance - The company has achieved a record third quarter and nine months, indicating a trajectory towards its best year ever [1] - Capital generation has exceeded expectations, with an acceleration in performance compared to initial three-year plans [2] Investment Strategy - The company plans to continue investing to enhance performance in 2026, 2027, and 2028, despite considering the magnitude of these investments [3][4] - New investments will focus on technology, AI, and network expansion to drive growth [8][9] Shareholder Returns - Shareholder remuneration is expected to remain top-tier, with dividends increasing and share buybacks slightly down, but overall distributions aligning with previous levels [5][6] - The company has invested €6.5 billion in two stakes, contributing an additional €1 billion to projections for 2027 [5] Market Position and Partnerships - The company has consolidated its position with Alpha Bank, indicating a strong partnership that is expected to yield significant value [10][11] - The company recognizes the growth potential in Greece, which is outperforming core EU countries in GDP growth [11] Economic Outlook - The company acknowledges the complexities in the near-term economic environment, particularly regarding interest rate adjustments and their delayed impacts [20][21] - There is a belief that performance dispersion among institutions will create opportunities for the company to exceed market expectations [22]