Renk’s Record Order Book Hits €6.9 Billion, but Earnings Per Share Tumbles

The Augsburg-based gearbox specialist delivered its strongest-ever start to a fiscal year, yet the market response was anything but celebratory. Renk’s first-quarter order intake surged to a record €582.3 million, pushing the total backlog to an all-time high of €6.9 billion. Management has already locked in more than 90% of the planned annual revenue through signed contracts.

The operational highlights, however, were overshadowed by a sharp drop in earnings per share, which fell from €0.46 in the prior-year period to just €0.15. That decline weighed heavily on investor sentiment, even as adjusted operating profit climbed to €42.4 million and the corresponding margin improved to 15%.

Sector-wide sell-off compounds the pain

Renk’s shares lost roughly 4.4% on Thursday, closing at €51.40 on Xetra. The stock now trades 14% below its 200-day moving average and has shed more than 40% from the 52-week high of €88.73 set last October. The relative strength index stands at 86.8, a reading that typically signals overbought conditions despite the recent pullback.

Should investors sell immediately? Or is it worth buying Renk?

The broader European defence sector dragged Renk lower. Rheinmetall dropped around 3% on the same day, while Hensoldt shed more than 3%. Analysts attribute the weakness to profit-taking after an exceptional 2024, coupled with growing unease that the sector’s growth momentum may be cooling.

Analysts see value in the disconnect

Despite the share price slide, the analyst community remains firmly constructive. Deutsche Bank reaffirmed its buy recommendation with a €73 price target, with analyst Christophe Menard pointing to the better-than-expected order intake and solid EBIT performance. Jefferies, Berenberg and JPMorgan also maintain buy ratings, and the consensus price target stands at €72.50 — well above current levels.

For the 2025 financial year, the board has proposed a dividend of €0.58 per share, with payment scheduled for June 15, 2026. Management is sticking to its full-year guidance, forecasting revenue to exceed €1.5 billion.

The next catalyst on the calendar

Investors will get the next update on August 6, when Renk publishes its second-quarter results. The key question is whether the €6.9 billion order backlog can be converted into revenue and profit growth — and whether that will finally close the wide gap between the current share price and the analysts’ price targets.

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