Renk’s Record Backlog and New Gear Can’t Stop the Slide: All Eyes on Management’s Next Moves

Renk reports Q1 order intake of €582M, backlog at €6.9B, but shares near 52-week low. Analysts bullish with Buy ratings, citing low valuation and strong medium-term outlook.

Renk’s operations are humming, but the stock has been battered. The defence drivetrain specialist reported order intake of €582.3 million in the first quarter, lifting its backlog to a record €6.9 billion. A book-to-bill ratio of 2.1 means new orders are coming in more than twice as fast as revenue is being recognised. Yet the shares closed at €43.91 on Friday, down 2.65% on the day and 20.43% since the start of the year — within a whisker of their 52-week low of €43.99.

Quarterly revenue rose 4.0% to €283.6 million, and adjusted EBIT landed slightly ahead of consensus. Management reaffirmed its full?year outlook: revenue above €1.5 billion and adjusted EBIT between €255 million and €285 million. Over 90% of the sales planned for 2026 are already underpinned by orders and framework agreements, giving the board confidence in its medium?term trajectory. Yet the market is pricing in persistent doubt rather than operational strength.

Analysts have pushed back against the sell?off. mwb research upgraded the stock to “Buy” with a €53 target, noting an EV/EBITDA of 9x and a P/E of 16x on 2028 estimates. Warburg Research kept its “Buy” rating and €63 target. Both see room for consensus estimates to move toward the upper end of Renk’s guidance, supported by a growing aftermarket share that should smooth earnings.

But momentum will be tested over the next month. On 20 May, CEO Alexander Sagel presents at the 19th International Investment Forum — a digital Livestream event that lets analysts question management directly. The market wants to see how Renk translates its order bonanza into margin expansion and free cash flow, not just top?line growth.

The company’s product push includes the new ESM 280 gearbox, a derivative of the ESM 350 designed for heavy wheeled armoured vehicles around 40 tonnes. It will be shown at Eurosatory in Paris from 15 to 19 June, where Renk also plans to unveil a heavy unmanned ground vehicle developed with Patria. The ESM 280 slots into Renk’s “NextGen Mobility” strategy, which foresees €325 million in investment through 2028. At the Augsburg plant, annual gearbox capacity is set to rise to 800 units by year?end. Geographically, Renk is opening new service and production sites in Poland to shorten supply lines to customers in Ukraine and the Baltics.

Investors face two other key dates. The virtual annual general meeting on 10 June will vote on a proposed dividend of €0.58 per share, a 38% increase from the previous year, and on a domination and profit transfer agreement between RENK Group AG and RENK GmbH. A drag from the first quarter — stranded deliveries to Israel due to a German export embargo — is expected to fade from the second quarter onward. Management says the bulk of the year’s targeted sales is already secured.

Technically, the chart is flashing warning signs. The share has broken below several support levels, and a close under €43.99 would open the door to the €40 zone. A move back above €45.97 would ease the selling pressure, but for now the bears have the upper hand. The tension between a record order book and a falling stock price makes Renk one of the most closely watched names in the European defence sector this spring.