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Investing.com -- Renk Group shares fell on Thursday after the company raised its long-term revenue ambitions but offered only modest adjustments to nearer-term earnings targets at its capital markets day (CMD).
The stock was down 7.5% in Germany by 09:24 GMT.
The broader European defence sector was also under pressure, weighed down by a U.S.-backed peace proposal for Ukraine that included significant concessions to Russia.
Renk on Wednesday lifted its 2030 revenue expectation to 2.8 billion to 3.2 billion euros, excluding M&A, up from its prior 2.5 billion to 3.0 billion euro range that had included acquisitions. It also set an adjusted EBIT margin target of more than 20% for 2030.
Chief Executive Alexander Sagel said growth should accelerate from 2028 as European defence investment rises and demand strengthens across fighting-vehicle platforms. He added that Renk would widen its offering to include transmissions for lighter tracked vehicles and unmanned ground systems.
“The super cycle in the defense sector and the resulting profitable growth are not only reinforcing our market position, but also creating the basis for targeted expansion of our product portfolio beyond 2030,” he said.
Renk expects defence to account for 90% of revenue by 2030, up from roughly three quarters in the first nine months of the year. The company also nudged its 2028 sales target to above 2 billion euros and lifted its 2027 adjusted EBIT goal to more than 300 million euros.
Jefferies analyst Chloe Lemarie said Renk’s long-term revenue ambition was “solid,” but added that the 2027 EBIT hike was “soft.”
"The 2027 and 2028 outlooks are only tweaked to "above" the prior guide, which might be slightly underwhelming given consensus stands c.20% above the prior 2027 EBIT guide," Lemarie commented.
Renk, which has seven sites in the U.S., plans to consolidate its American activities next year under a single unit, Renk Inc.
Separately, Kepler Cheuvreux analysts said the higher long-term sales ambition represents a meaningful uplift and highlighted management’s mapping of NATO-driven spending, with 2026–27 positioned as backlog-conversion years and most of the expansion expected from 2028.
"RENK’s CMD turns the story into a timing thesis: operations say “can do,” backlog says “will do,” margins still need to prove “how much” once the original equipment (OE) wave hits before aftermarket tails kick in," analysts Sven Sauer and Michael Raab wrote.
While they see the revenue trajectory as credible, analysts said that achieving a margin above 20% by 2030 “looks ambitious given an OE-heavy 2028–29 before aftermarket catches up.”
The broader European defense sector was also in the red on Friday, following Washington’s push for Kyiv to consider a framework that would end the war after more than three years.
Shares in Germany’s Rheinmetall fell more than 5%, BAE Systems slipped 2.2% in London, while Thales and Leonardo dipped 1.9% and 4.2%. Safran also slipped 1.8%.
The proposal plan, seen by Reuters, would require Ukraine to give up the entire Donbas region, recognise Crimea, Luhansk and Donetsk as de facto Russian, and reduce its armed forces to 600,000 troops.
It says Ukraine would “receive robust security guarantees,” without providing further detail.
Ukrainian President Volodymyr Zelenskiy said he would review the proposal and discuss it with Washington, adding he was ready for “honest” work with the United States on a plan to end the war, while European allies signalled resistance to such concessions.