Thyssenkrupp's Steel Turnaround Gains Traction as Jefferies Backs Buy Rating
Published on 09/23/2026 at 16:30 | Editorial boerse-global.de
European steel markets may be on the verge of a reversal after a prolonged stretch of sluggish demand, and Jefferies is positioning Thyssenkrupp as a prime beneficiary. In a study released Tuesday, analyst Cole Hathorn reiterated a "Buy" rating on the Essen-based industrial group with a price target of EUR 13, arguing that the bottom of the customer inventory cycle has been passed.
Price Recovery and Margin Upside
With destocking on the customer side now largely complete, Hathorn expects EU steel prices to climb again through next year following a consolidation phase in September and October. That would offer meaningful relief on the revenue side for the German conglomerate. Even if overall demand stays subdued, the bank anticipates a noticeable widening of margins, which could prompt upward revisions to market estimates for the group's operating result in 2027.
Cost pressures, meanwhile, look manageable. Jefferies notes that energy expenses for the company remain contained, since its own steel production continues to rely predominantly on coal.
Wage Talks and a New Demand Driver
Labor costs are moving into focus in the coming weeks. IG Metall is demanding a 5% pay increase for roughly 3.7 million workers across Germany's metal and electrical industry, with a twelve-month contract term. The first regional negotiations between unions and employers are set to begin on October 7.
Should investors sell immediately? Or is it worth buying Thyssenkrupp?
On the demand side, the technology sector is emerging as a structural source of momentum for the steel business. The global buildout of AI data centers is generating additional material requirements. Thyssenkrupp estimates that an average data center with around 10,000 server racks consumes roughly 1,000 tons of steel, while larger cloud infrastructure projects can require a multiple of that figure, according to industry estimates.
Quarterly Progress Against a Full-Year Loss
The business quarter through the end of June brought some relief. Revenue rose 7.79% year over year to EUR 8.79 billion, and the company reached breakeven on earnings per share after previous deficits. For the full fiscal year 2026, however, the picture remains demanding: analysts on average project a loss of EUR 0.832 per share. On the payout side, market observers expect continuity, forecasting an unchanged dividend of EUR 0.15 per share.
Market participants are watching strategic progress closely. Following the spin-off of materials trading unit TK Accelis roughly three weeks ago, the group is pressing ahead with the reorganization of its structures. The realignment is absorbing considerable resources in a challenging economic environment, though it promises clearer profiles for individual business segments over the medium term.
Thyssenkrupp at a turning point? This analysis reveals what investors need to know now.
Share Price and Valuation Debate
In Wednesday trading, Thyssenkrupp shares slipped 1.8% intraday to EUR 15.07, though the stock remains within reach of its recently marked 52-week high of EUR 15.86. The paper has gained 62% since the start of the year, with the market broadly supportive of the ongoing restructuring. Even so, many observers remain cautious about the upcoming close of the fiscal year, and whether the next steps of the overhaul can dispel that skepticism will depend heavily on further decisions before year-end.
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