Thyssenkrupp's Path to Profitability: A Tightrope Walk Between Tariffs and Restructuring

EU's new 50% steel import tariff lifts Thyssenkrupp shares, but deep restructuring costs and a bearish Barclays rating highlight the company's ongoing challenges.

Thyssenkrupp shares closed at €9.26 last week, a level that encapsulates the fierce tug-of-war surrounding the German industrial conglomerate. On one side, a powerful new regulatory catalyst has emerged from Brussels. On the other, a painful corporate restructuring and a skeptical analyst community continue to apply heavy downward pressure.

The European Union has fundamentally reshaped the rules for steel imports, a move that directly benefits domestic producers like Thyssenkrupp. On April 13, the European Council and Parliament agreed on a significantly tougher trade protection instrument. The new regulation slashes the duty-free import quota to 18.3 million tonnes per year, a 47 percent reduction from previous levels. Any imports beyond that will face a 50 percent tariff, double the previous 25 percent rate. This framework, set for formal adoption before the current safeguards expire on June 30, 2026, is designed to shield EU steelmakers from foreign competition, granting them greater pricing power in their home market. The stock reacted immediately to the news, jumping 6.5 percent on Friday alone and gaining over eight percent for the week.

Yet, this regulatory tailwind is hitting a company in the midst of a costly and complex transformation. The first-quarter figures laid bare the strain. While Thyssenkrupp posted an adjusted EBIT of €211 million on revenue of €7.2 billion, restructuring costs—€401 million at Steel Europe alone—dragged the group to a net loss of €334 million. Management expects the full fiscal year to end with a net loss between €400 million and €800 million.

This bleak near-term outlook prompted a bearish move from Barclays. The bank cut its price target on Thyssenkrupp from €9.50 to €9.00, reaffirming its 'Underweight' rating. Analyst Tom Zhang cited reduced profit estimates for the current and coming financial years. The new target sits at the lower end of analyst expectations, where the consensus stands at €10.78. Barclays sees little cause for optimism in the core European steel business, noting that geopolitical risks in the Middle East, volatile raw material prices, and persistent supply chain issues continue to cloud demand prospects despite some slight quarterly improvement.

The company's path forward is being carved out along several parallel tracks. In steel, a collective bargaining agreement to realign the business was concluded in December 2025. This was followed by a term sheet with Salzgitter in February 2026 regarding the future of the Krupp Mannesmann blast furnaces, with a transfer of HKM shares to Salzgitter planned for June 1, 2026. Beyond steel, the group is reviewing the future of its Materials Services division, a €11.4 billion revenue business. Options include an IPO in autumn 2026, a spin-off, or an outright sale.

Investors are now focused on a handful of near-term catalysts that could break the stalemate. The half-year report on May 12 will provide the first clear look at whether the restructuring is gaining traction. Before June 30, the formal EU vote on the new steel tariff regulation is expected. Furthermore, the deadline for revised bids on a major Canadian submarine contract, where Thyssenkrupp's marine subsidiary TKMS is competing against Hanwha Ocean, falls on April 29.

The most significant potential catalyst, however, remains the possible sale of TK Elevator. Finnish rival Kone is in talks with private equity firms Advent and Cinven about a takeover, with the owners targeting a valuation of up to €25 billion including debt. Such a deal would provide a massive cash injection for the parent company. Until these events unfold, the stock—down roughly 4 percent year-to-date—remains caught between the promise of regulatory relief and the harsh reality of its ongoing corporate overhaul.