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Investing.com - Barclays initiated coverage on German defense electronics company Hensoldt AG (ETR:HAG) with an Equalweight rating and a price target of €88.00.
The research firm noted that Hensoldt has established a strong position in radars and optronics, with its backlog having tripled since 2019, now covering three years of revenue. Despite this strength, Barclays indicated that real growth acceleration will take longer to materialize compared to short-cycle peers due to the very long duration of Hensoldt’s portfolio.
Barclays highlighted potential near-term challenges, including the integration of ESG and possible additional investment requirements for production capacity, which may limit margin progression. The firm’s analysis suggests that upside for the shares would require both decent growth in Germany and earlier-than-expected share gains in export markets.
The research firm positioned its revenue forecast approximately 8% ahead of consensus, anticipating an update to Hensoldt’s 2030 targets that could be announced at the upcoming Capital Markets Day in November 2025. Barclays projects EBITDA margins reaching 20.0% by 2030, compared to 18.1% for fiscal year 2024 and the consensus estimate of 20.3%.
Barclays forecasts 21% earnings growth for Hensoldt, exceeding most peers, but notes this growth is likely to be more back-end loaded, suggesting more attractive investment opportunities might be found elsewhere over the next 12 months.
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