The RENK Group AG, a major player in the defense industry, demonstrates strong operational performance in fiscal year 2025, characterized by record values and solid growth. In the first quarter of 2025, RENK reported an increase in revenue of 6.8 percent to 31 million euros, despite a slight decline in order intake in the sliding bearings segment (down 5.2 percent), along with an EBIT increase of 9.3 percent to 5 million euros. These figures bolster the confidence of the board and management regarding the annual targets: Revenue is expected to exceed 1.3 billion euros and adjusted EBIT to be between 210 and 235 million euros.
The Tailwind from the Global Defense Boom
RENK’s tailwind comes particularly from the global defense boom. The planned massive defense spending in the USA – with an increase in the military budget of about 13 percent to around one trillion US dollars in 2026 – strengthens not only the US defense industry itself but also lifts European suppliers like RENK. This development is further fueled by geopolitical tensions in Europe and the Middle East. The stock reached a new all-time high of around 60 euros in early May.
Valuation and Future Prospects
Despite this positive operational momentum, there are valuation doubts among investors. The high valuation of RENK as a niche provider of specialized gears and global acquisitions leads to uncertainties regarding the sustainability of the stock market highs. Analyst opinions are varied; political uncertainties, particularly in Germany, cause nervousness among investors. Furthermore, the actual test for RENK is not expected until the years 2026/27, when it must be demonstrated whether the company can achieve its ambitious medium-term targets – such as revenue of two billion euros by fiscal year 2028.
In summary:
- Operational Strength: Stable growth in revenue and EBIT despite a slight decline in order intake; annual targets confirmed.
- Market Environment: Benefits from the global defense boom, especially due to increased defense spending in the USA.
- Valuation Risks: High expectations are already reflected in the stock price; political risks and analyst estimates partially temper the euphoria.
- Future Prospects: Medium-term goals remain ambitious; decisive performance evidence is expected from the middle of the decade.
For investors, this means: RENK remains an attractive value in the growth segment of defense technology with strong operational fundamentals. At the same time, they should consider existing valuation doubts as well as geopolitical uncertainties.