The disconnect between Renk’s bulging order book and its languishing share price is becoming harder to ignore. The Augsburg-based defence group has racked up record orders, secured a multi-year NATO framework agreement, and posted a near-doubling of net profit — yet the stock sits roughly 39 percent below its October 2025 peak. The culprit, analysts say, is a persistent cash conversion problem that investors will scrutinise when first-quarter results land on 6 May.
Record Backlog, Weak Cash Generation
Renk’s 2025 full-year numbers painted a picture of operational strength. Revenue reached €1.37 billion, adjusted EBIT climbed 22 percent to €230 million, and net profit nearly doubled to €101 million. The board has proposed a dividend of €0.58 per share, up from €0.42 a year earlier.
But the free cash flow figure of €67 million fell well short of internal targets. Roughly €200 million in revenue was pushed into the first half of 2026 — booked orders that have yet to translate into cash. That gap between reported earnings and actual liquidity is the central concern for equity investors.
The order backlog, meanwhile, has swelled to a record €6.68 billion, covering more than 90 percent of the projected 2026 revenue. For the current year, management expects turnover above €1.5 billion and adjusted EBIT in a range of €255 million to €285 million.
Analyst Conviction Holds Despite Stock Slump
Jefferies has maintained its buy rating with a €78 price target, noting that management expressed confidence in hitting the upper half of the adjusted EBIT guidance range. Deutsche Bank analyst Christophe Menard raised his target to €73 after a pre-close call revealed that order intake had exceeded the previous guidance range. JPMorgan sees fair value at €75, while DZ Bank is more conservative at €65.
Should investors sell immediately? Or is it worth buying Renk?
Even the lowest of those targets implies meaningful upside from Friday’s closing price of €54.44, which left the stock just below its 50-day moving average. The decline has been attributed largely to sector-wide profit-taking rather than company-specific weakness.
Production Bottlenecks and the Michigan Pivot
Operational hurdles remain, particularly in the Marine & Industry segment, where logistics delays and component shortages are pushing revenue into later quarters. Renk has also restarted production for Israel after an export ban was lifted, with material revenue contributions expected this year.
To sidestep future German export restrictions, Renk is doubling down on its US footprint. The Muskegon, Michigan, facility is set to receive around $150 million in investment by 2030, allowing the group to route international orders through the US Foreign Military Sales programme. In Poland, new service and production plants are planned to serve customers in Ukraine and the Baltics, with total investment in the region reaching roughly €500 million over five years.
Back in Augsburg, annual gear unit capacity is on track to hit 800 by the end of 2026 — more than 2.5 times the pre-war level of 300.
Key Dates Ahead
The stock has recovered about 17 percent from its 52-week low of €46.64 in March, but remains slightly in the red on a weekly basis. The 6 May quarterly release will show whether the deferred revenues have been converted as planned, and whether the gap between order intake and cash generation is finally narrowing. The annual general meeting follows on 10 June, where shareholders will vote on the proposed dividend.
Ad
Renk Stock: Buy or Sell?! New Renk Analysis from April 25 delivers the answer:
The latest Renk figures speak for themselves: Urgent action needed for Renk investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from April 25.
Renk: Buy or sell? Read more here...
