Renk’s Record Backlog Fails to Arrest Slide as Shares Plumb New Lows

Renk stock slides to 52-week low despite record €6.9B backlog and strong orders. Key catalysts: Eurosatory, dividend increase, and lifting of Israel export embargo.

The defence gear specialist Renk is caught in a stark disconnect between surging orders and a plunging stock price. On Friday, shares closed at €43.91, a new 52-week low and a far cry from the October high of €88.73 — a drop of more than half. The slide comes even as the company sits on an all-time-high order backlog of €6.9 billion, with new business flowing in at more than double the pace of revenue recognition (book-to-bill ratio of 2.1).

Investor sentiment has soured despite a solid first-quarter performance. Revenue climbed 4% to €283.6 million, and adjusted EBIT also improved. But the market, accustomed to the supercharged valuations of defence stocks, was unimpressed by moderate growth. The broader industrial backdrop offers little relief either: an EY analysis shows Q1 profits among DAX industrial companies rose just 0.5%, the second-weakest reading in six years. That headwind weighs on specialists like Renk, whose valuation depends heavily on long-term growth narratives.

Technical indicators reinforce the bearish mood. The stock trades roughly 27% below its 200-day moving average and is down more than 20% year-to-date. The relative strength index sits at 77.7, signalling overbought conditions that often precede further selling. With several support levels already breached, the next major floor looms near €40 if selling pressure persists. A close back above €45.97 would ease the immediate downside risk.

Against this technically fragile picture, Renk is rolling out strategic initiatives that could shift the narrative. At the Eurosatory defence exhibition in Paris from June 15-19, the group plans to showcase a heavy unmanned ground vehicle developed with Patria and debut its new ESM 280 gearbox. The “NextGen Mobility” programme, backed by €325 million in investment through 2028, aims to lift annual gearbox capacity at its main plant to 800 units by year-end. Geographical expansion continues too, with new service and production bases in Poland designed to shorten supply lines for customers in Ukraine and the Baltics.

Shareholders have a busy calendar ahead. At the annual general meeting on June 10, they will vote on a proposed dividend of €0.58 per share — a 38% increase from last year. Also on the agenda is a domination and profit transfer agreement between RENK Group AG and its GmbH entity. A lingering drag from the first quarter — halted deliveries to Israel due to a German export embargo — is expected to lift from the second quarter onward, with management noting that more than 90% of the planned full-year revenue is already secured by orders or framework agreements.

The company maintains its full-year guidance of over €1.5 billion in revenue and adjusted EBIT between €255 million and €285 million. The challenge now is convincing the market that robust order intake can be converted into meaningful margin improvement. The next quarterly report will be the crucial test of whether Renk can close the gap between operational strength and investor confidence.