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On Monday, JPMorgan analyst David Perry upgraded Hensoldt AG (HAG:GR) stock rating from Neutral to Overweight and significantly increased the price target to €110 from the previous €50. The new price target suggests a potential 20% upside within the next 18 months.
In his assessment, Perry highlighted Hensoldt AG’s robust outlook for the next five years, anticipating an exceptionally strong performance. He further projected that the period from 2031 to 2035 could mark an even more vigorous phase for the company. This optimistic view is supported by Hensoldt’s recent guidance issued on May 7th, which forecasts an organic sales compound annual growth rate (CAGR) of at least 15% through to 2030.
The analyst also foresees a considerable expansion in the company’s EBITA margin by approximately 200 basis points, coupled with a robust free cash flow (FCF). Adjustments were made to the estimated earnings per share (EPS) for the years 2025 to 2027, with a decrease of 8%, a minor 2% reduction, and an increase of 5% respectively. Additionally, Perry introduced new EPS estimates for the years 2028 to 2030.
The revised price target is based on applying significantly higher target multiples to Hensoldt AG’s estimates. Perry’s approach aligns with the valuation methodology used for similar companies such as Rheinmetall (ETR:RHMG) and RENK, both of which also hold an Overweight rating from JPMorgan. The upgrade and optimistic price target reflect confidence in Hensoldt AG’s growth trajectory and financial performance over the coming years.
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