Thyssenkrupp: Cost-Cutting and Submarine Orders Lift Shares as Waterfall Unit Nucera Stumbles

Thyssenkrupp shares climb 20% on strong restructuring and defense orders, but hydrogen unit Nucera's steep revenue miss tempers optimism.

Thyssenkrupp’s stock has climbed nearly 20% over the past month, a rally that masks a sharply divided corporate picture. The industrial conglomerate’s radical restructuring programme — spearheaded by chief executive Miguel López — is winning plaudits from investors, even as a disastrous quarterly miss at its water-electrolysis subsidiary Thyssenkrupp Nucera threatens to puncture the mood. On Friday, the shares slipped 2% to €10.55, but they remain well above the 200-day moving average of €9.87 that technical analysts watch as a key support level.

The operational turnaround at the parent company is gathering force. In the second fiscal quarter, adjusted operating profit surged to €198 million from a paltry €19 million a year earlier, powered by internal cost programmes and improvements across nearly all divisions. Revenue dipped slightly to around €8.4 billion amid weaker pricing and demand, but the order intake jumped 32%, driven largely by the defence unit Marine Systems (TKMS), whose backlog now exceeds €20 billion. The balance sheet remains comfortable: equity covers more than a third of total assets, while net financial cash provides ample liquidity for further restructuring.

That restructuring includes painful cuts at the steel division, the group’s perennial headache. Management is planning to eliminate or spin off up to 11,000 of the 26,000 jobs at its Ruhr-based steel operations as it pushes the business towards full independence. The disposal of the Automation Engineering unit to Agile Robots has already been completed, and a new shareholder structure for the Hüttenwerke Krupp Mannesmann (HKM) joint venture is expected to be announced in early June. The strategy is to transform Thyssenkrupp into a financial holding company, shedding industrial complexity to unlock value.

Yet the progress at the corporate level has not been matched by Nucera, the hydrogen technology offshoot that was supposed to be a growth engine. The Wasserstoff-tochter reported a loss per share for the latest quarter, while revenue came in at just $50 million — barely a third of the $150 million analysts had pencilled in. The miss was stark, but the unit’s underlying momentum tells a different story: Nucera booked a record order inflow in the triple-digit millions, including a major electrolyser project in Spain, pushing its total backlog to more than €730 million. The challenge now is to convert that pipeline into profitable revenue.

On the defence side, Marine Systems continues to strengthen its technological edge. TKMS recently secured a key technical approval for a 25-metre-long autonomous submarine, with trials of the demonstrator scheduled for late 2026. The division’s full order book gives the group breathing room, and the next big catalyst could come between May and June, when Canada is expected to decide on a warship contract worth over $10 billion. Winning that order would be a further boost to the already bulging backlog.

For the full year, management has adjusted its targets. Adjusted EBIT is now forecast in a range of €500 million to €900 million, while revenue is expected to decline by up to 3% — a downgrade from the previous guidance of a slight increase. The group aims to return to positive free cash flow before mergers and acquisitions. A dividend of €0.15 per share is pencilled in for the current fiscal year.

Analysts are cautiously optimistic. Morgan Stanley recently raised its price target to €10.60, while the consensus average sits at around €12. Citigroup lifted its own target after the results, citing fresh catalysts. JPMorgan holds a neutral view at €11.80, and Barclays remains underweight. The near-term direction will depend on whether Thyssenkrupp can execute its restructuring without further operational surprises — and whether Nucera can turn its record order book into the earnings that investors were expecting.