The Augsburg-based drivetrain specialist is taking matters into its own hands. Faced with German export bans on gear systems destined for Israeli Merkava and Namer military vehicles, Renk is shifting production to its Muskegon, Michigan facility. The US plant is set to receive around $150 million by 2030, allowing the company to route international orders through the US Foreign Military Sales program and bypass German approval authorities entirely. The risk for 2026 is tangible: between €80 million and €100 million in revenue hangs in the balance if Berlin continues withholding permits.
The broader investment plan is ambitious. Renk is committing roughly €500 million over the next four to five years, spread across Germany, Eastern Europe, and North America. Augsburg alone will absorb up to €325 million through 2028, earmarked for capacity expansion, digitalization, and new technologies such as drive-by-wire systems. Annual gear production at the main plant is slated to hit 800 units by the end of 2026, more than two and a half times pre-war levels. In Poland, new service and production sites are being established to serve customers in Ukraine and the Baltics.
Record Orders, But the Stock Stalls
Operationally, the first quarter of 2026 delivered a record order intake for any opening quarter, with mwb research estimating the figure at roughly €585 million. Management confirmed the milestone during a pre-close call on April 22. Yet the market response was muted: the stock slipped four percent on Friday, trading at €54.35, about ten percent below its 200-day moving average. The disconnect between strong bookings and weak price action reflects underlying headwinds.
US tariffs are weighing on plain bearing sales, while logistics bottlenecks are hampering the marine and industrial segments. Management expects around €10 million in delayed revenue, a timing issue that nonetheless dims the first-quarter optics. Revenue is estimated at roughly €280 million, below the consensus forecast of €304 million. Adjusted operating profit is projected at €40 million, down from €43 million a year earlier.
Should investors sell immediately? Or is it worth buying Renk?
Cash Conversion Remains the Weak Spot
Free cash flow stood at €67 million, with a cash conversion rate of just 47 percent — far below the internal target of over 80 percent. The culprit is a combination of delayed customer payments and higher working capital needs. Roughly €200 million in revenue slipped from 2025 into the first half of 2026, adding to the strain.
Analyst sentiment is split. Jefferies’ Chloe Lemarie raised her price target to €78, while J.P. Morgan sits at €75 and DZ Bank is more cautious at €65. Deutsche Bank lifted its target to €73 after the pre-close call, maintaining a “Buy” rating, with analyst Christophe Menard viewing the full-year order target of €2 billion as achievable. On the other side, mwb research sticks with “Hold” and a €53 target, arguing that consensus estimates for first-quarter revenue need downward revision, even if the fundamental story remains intact.
Full-Year Targets Stay Firm
Management is holding its 2026 guidance: revenue above €1.5 billion, adjusted EBIT between €255 million and €285 million, and a margin in the upper half of the target range. More than 90 percent of planned revenue is already secured. The medium-term ambition is to reach revenue between €2.8 billion and €3.2 billion by 2030, with an adjusted margin above 20 percent.
The stock currently trades at around €53.50, roughly 14 percent above its March low but still nearly 40 percent below the October peak. All eyes are on May 6, when Renk publishes full first-quarter results. That report will reveal whether the delayed prior-year revenues have been booked as expected and whether the cash conversion rate is finally turning upward. On June 10, shareholders vote on a proposed dividend increase to €0.58 per share, a 38 percent jump from last year.
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