FRANKFURT (dpa-AFX) - German defense stocks recovered somewhat on Thursday morning. Rheinmetall again set itself apart from its 100-day average line by up to 1.8 percent. Hensoldt recovered more than 2 percent from the exponential 200-day line and Renk gained 1.5 percent within the recent trading range.

The sector had a tough time the day before. The German government's draft budget only provides for a small increase in the defense budget. This means that there is little sign in Germany of the turning point in European armaments policy in light of the war in Ukraine.

In his current outlook for the reporting season, however, expert Victor Allard from Goldman Sachs is optimistic - especially for Rheinmetall and Rolls-Royce. His operating earnings forecast for Rheinmetall is 13 percent above consensus. The current strong order intake is an open secret, so the main focus should be on 2025 and the following years.

Allard is less euphoric at Renk. But his colleagues at Oddo BHF have upgraded the shares to "outperform". The below-average performance of the shares compared to Rheinmetall and Hensoldt offers an opportunity to re-enter the market, they said. At times, Renk has corrected 43 percent since the record in April. For Rheinmetall it was around 20 percent and for Hensoldt 30 percent./ag/mis