Renk Fortifies Its Board and Shareholder Payouts as a Halved Stock Price Defies Record Orders

Defence supplier Renk’s stock plunges nearly 50% from peak as operational metrics improve; management announces governance changes, new chairman, and record dividend to restore market confidence.

The market’s verdict on Renk is getting harsher by the day — even as the defence supplier’s operational scorecard keeps improving. Shares touched a fresh 52-week low of €43.91 on Friday, nearly 50% below the peak hit last October, before recovering marginally to €45.09. That price action stands in stark contrast to a business firing on multiple cylinders: a €7 billion order backlog, double-digit earnings growth, and a newly announced 38% dividend hike.

Management is now rolling out a package of governance and capital-allocation measures designed to bridge the credibility gap. At the annual general meeting on 10 June, shareholders will vote on a proposed dividend of €0.58 per share — a sharp increase from the prior year. They will also elect Dr Klaus Richter, a veteran of Diehl Group and former chief procurement officer at Airbus, as the new chairman of the supervisory board, replacing Claus von Hermann. In addition, the board has pre-emptively extended CEO Alexander Sagel’s contract by five years, locking in his leadership through 2032. A new domination agreement with Renk GmbH is also on the agenda, aimed at simplifying internal processes.

The moves come as the stock continues to defy solid fundamentals. First-quarter revenue rose 4% to €283.6 million, while adjusted EBIT jumped 10.4% to €42.4 million, lifting the margin to 15%. The military gear division, which makes transmissions for tracked vehicles, was the standout: revenue climbed 11.2% to €191.5 million, with an adjusted margin of 18.3%. The full-year outlook remains intact — revenue above €1.5 billion and adjusted EBIT in a range of €255 million to €285 million — and more than 90% of planned sales are already backed by orders or framework agreements.

Yet analysts are divided on what the stock is worth. MWB Research upgraded Renk to Buy with a €53 target, arguing the market has overreacted. On 2028 estimates, they see an EV/EBITDA multiple of 9x and a P/E of 16x — levels they consider attractive. Goldman Sachs, however, holds at Neutral but slashed its price target to €65 from €70 on 14 May, citing the latest quarterly results. Warburg Research keeps a €63 target. The world’s largest asset manager, BlackRock, appears to side with the bulls: it increased its overall stake from 3.63% to 4.44% as of 7 May, a vote of confidence amid the sell-off.

Renk isn't standing still on the product front either. On 5 May it unveiled the ESM 280 transmission, designed for armoured wheeled vehicles with power outputs up to 620 kilowatts, transferring technology from tracked platforms. At the Eurosatory defence exhibition in June, it will showcase a heavy unmanned ground vehicle in partnership with Patria, featuring the HSWL 076 drive-by-wire gearbox. And in a first for the maritime domain, Renk won a contract to supply propulsion components for an unmanned surface vessel for a NATO member state.

The broader defence sector is suffering from a similar disconnect. Rheinmetall and Hensoldt both reported record quarterly numbers, yet their shares also corrected. Market observers point to a cocktail of geopolitical uncertainty and a more discerning valuation climate after years of stellar gains. For Renk, the immediate test comes on 20 May at the International Investment Forum, followed by roadshows in New York and Frankfurt where Sagel will pitch the company’s story on margins and free cash flow.

Longer term, the targets are ambitious. Renk aims to lift annual revenue to up to €3.2 billion by 2030 — nearly 2.5 times last year’s €1.37 billion — and push the operating margin above 20%. For now, the market is demanding proof that the gap between those ambitions and a stock trading at less than half its high can be closed.