Renk’s Q1 Profit Jumps to €15.4M and CEO Gets Five More Years, Yet Shares Hit €44.80 52-Week Low

The Renk Group managed to offer its shareholders two pieces of essentially good news on Tuesday while its stock nonetheless skidded to a fresh 52-week low of €44.80. Chief executive Alexander Sagel received a five-year contract extension running until March 2032, a move that supervisory board chairman Claus von Hermann said should “ensure continuity” during a period of surging demand from the Bundeswehr and NATO allies. The extension came on the same day the company’s first-quarter earnings landed with a thump: net profit exploded to €15.4 million from under €1 million a year earlier, while order intake climbed to €582 million.

Management is aiming for full-year revenue above €1.5 billion and an operating result in the range of €255 million to €285 million. The revenue target draws on what the company calls a stable order book in the defence sector, a judgement that appears supported by the Q1 figures. Analysts at Warburg Research kept a buy recommendation with a €63 price target, noting that first-quarter results “met market expectations exactly” and that achieving the upper end of the full-year forecast was a realistic prospect.

Sagel’s team also pointed to ongoing work in the United States, where subsidiary Renk America is co-developing autonomous capabilities for the U.S. Army’s Armored Multi-Purpose Vehicle alongside BAE Systems and Forterra. A “drive-by-wire” system for the HMPT transmission – a component fitted across all medium tracked U.S. military vehicles – is the core of the project. Further expansion into platforms such as the Bradley infantry fighting vehicle underscores Renk’s deepening footprint in North America.

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

Yet little of that positive operational story resonated on the trading floor. The stock has now lost roughly 19% in the past seven trading days alone, pulling it decisively below its 200-day moving average. Chart watchers say the break of key support near €45 has fuelled additional selling pressure; a sustained move below the current low could open the door towards €40. Some of the weakness is sector-wide, with peers such as Rheinmetall also recently giving up ground.

Warburg Research’s Christian Cohrs described the recent selling as “overdone” and reiterated the €63 target, arguing that the company’s fundamentals remain in stark contrast to its market valuation. The management is sticking with its full-year revenue and profit margins, while Renk America’s drive-by-wire focus points to a strategic positioning that few competitors can match. For now, however, the gap between operational strength and the share price appears wider than ever.