JPMorgan raises RENK Group stock price target to EUR90 on defense outlook

JPMorgan has raised its price target for RENK Group AG to EUR90.00 from EUR87.50, maintaining an Overweight rating, driven by increased earnings per share estimates for 2025-2030, with new 2027-2029 projections 8-13% above Bloomberg consensus. Despite RENK's recent 19% share price decline, which JPMorgan attributes to investor rotation, the bank expressed disagreement with this shift, reiterating its bullish stance on the defense sector and forecasting RENK as a major beneficiary of Germany's imminent armored vehicle program and defense spending over the next five years, implying a potential 29% upside over 18 months.

Analysis

JPMorgan has reiterated its bullish conviction on RENK Group AG by maintaining an Overweight rating and raising its price target to EUR 90.00 from EUR 87.50. This confidence is underpinned by a significant upward revision of its earnings per share estimates for 2025-2030 by 2% to 18%, placing its 2027-2029 forecasts 8% to 13% above the Bloomberg median consensus. The bank directly addresses the stock's recent 19% decline from its June 3, 2025 peak, attributing it to a sector rotation by some investors away from short-cycle, land-based defense investments. However, JPMorgan explicitly disagrees with this market shift, highlighting an imminent German program for new armored vehicles as a key catalyst that positions RENK to be a major beneficiary of sustained defense spending over the next five years. The new price target implies a potential 29% upside over an 18-month horizon, signaling a strong contrarian view against recent market flows.

Key Decisions for Investors

• The recent 19% share price decline could represent a strategic buying opportunity, especially as JPMorgan's earnings forecasts are significantly above market consensus, suggesting the stock may be undervalued if their view proves correct.
• Investors should closely monitor official announcements regarding Germany's armored vehicle procurement program, as the timing and scale of this initiative are the primary catalysts cited to support RENK's projected growth over the next five years.
• Acknowledge the contrarian nature of this investment thesis, which bets against the current market trend of rotating out of land-based defense; continued weakness in the sub-sector could pose a risk to the 18-month price target.
• Consider the specified investment horizon, as the 29% potential upside is framed over 18 months, while the core defense spending benefits are expected to materialize over at least the next five years, suiting a medium-to-long-term strategy.