Klöckner & Co: Rally Hits 12-Month High as Takeover Clock Ticks

Klöckner & Co shares surge 144% from trough, but BOTSI ranking dips as US tariffs boost earnings. Wide Q1 EBITDA range and pending squeeze-out add uncertainty.

A curious disconnect is playing out in Klöckner & Co shares. The stock has more than doubled from its November trough of €5.17, touching €12.58 — the highest level in twelve months — yet a key momentum tracker has edged it lower relative to peers.

The BOTSI®-Advisor, a trend-following system that has delivered an average annual return of 25.8 percent since 1999, slipped Klöckner from 14th to 15th place in its ranking of 330 DACH-listed equities on April 24. The downgrade is marginal, but it signals that other names in the universe have been gaining more ground recently, not that the steel distributor itself has lost steam.

Tariff Tailwind

While much of Europe’s steel sector has been bruised by the 25 percent US import levies on steel and aluminum, Klöckner finds itself on the winning side of the trade dispute. The company buys and sells locally in America, holding inventory purchased at lower prices that can now be sold at elevated market rates. Management expects this dynamic to boost earnings in the second and third quarters of 2026.

The financials already reflect a solid base. EBITDA before special items climbed to €171 million in 2025, up from €136 million a year earlier, while operating cash flow remained positive for the fourth consecutive year.

Wide Q1 Guidance

Visibility, however, is thin. The company’s forecast for the first quarter of 2026 spans an unusually broad range: €20 million to €60 million in EBITDA before special items. That €40 million gap underscores how little clarity management has on near-term trading conditions.

The first operational report under new majority ownership arrives on May 6, when Klöckner publishes its Q1 interim statement. Two weeks later, on May 20, the annual general meeting in Düsseldorf will see the board propose a dividend of €0.20 per share.

Restructuring for Margin

Klöckner has been reshaping its business toward higher-margin activities. Late last year, it sold eight US distribution sites to Russel Metals, shifting more weight onto its service-center operations. Excluding the divested locations, that segment accounted for 87 percent of group business in the first nine months of 2025, offering more stable demand and better profitability. Machinery and defense sectors are driving steel demand; construction remains subdued.

Squeeze-Out Scenario

The takeover by Worthington Steel is progressing, though regulatory approvals are still pending. Completion is expected in the second half of 2026. For minority shareholders, a key detail looms: German law requires a fresh company valuation to determine future compensation payments. If Worthington’s stake crosses the 90 percent threshold, the US group plans to squeeze out remaining holders and is considering delisting from the Frankfurt Stock Exchange.

Despite the asset sales, the board expects stable volumes and a significantly higher EBITDA for the full year 2026. Whether the stock’s rally has run ahead of fundamentals will become clearer when the first-quarter numbers land next week.