TKMS: A Canadian Megadeal, a German Retreat, and an Analyst Battle from 76 to 135 Euros

TKMS pivots to international mega-projects after being named preferred supplier for Canada's €20B submarine program, while walking away from domestic consolidation with German Naval Yards Kiel.

The past week has been a study in contrasts for Kiel-based naval shipbuilder TKMS. On Saturday, the company learned it had been tapped as the preferred supplier for Canada’s Canadian Patrol Submarine Project — a 12-boat, conventionally powered submarine program carrying an estimated price tag of €20 billion. If finalized, it would be the largest single contract in the company’s history. Yet just days earlier, TKMS walked away from a far more parochial opportunity: its non-binding offer for neighboring German Naval Yards Kiel collapsed after negotiations over economic terms failed to produce a deal, leaving rival Rheinmetall as the sole remaining bidder.

The divergence in fortunes underscores a strategic pivot. Rather than pursuing domestic consolidation, TKMS is channeling its industrial bandwidth toward international mega-projects. The Canadian selection — while still a “preferred supplier” designation rather than a signed contract — is widely regarded in the defense industry as the penultimate step before a formal award. And the company has been laying groundwork: on Friday, it signed a second letter of intent with Spanish partner Navantia, aiming to establish a joint framework for submarine and surface vessel projects by the end of 2026. That structure could prove directly relevant to the Canadian program, given Navantia’s role as a cooperation partner in multiple international tenders.

Even without the Canadian prize, TKMS is hardly wanting for work. At its half-year results for 2025/26 — with a March 31 cut-off — the company reported a record order backlog of €20.6 billion on revenue of €1.168 billion and adjusted EBIT of €60 million. That foundation was reinforced on July 9, when the German parliament’s budget committee approved the procurement of four MEKO A-200 DEU frigates (Type 128) worth roughly €6.3 billion, with TKMS as prime contractor and an option for additional vessels. In May, the board added depth with the appointment of Dr. Andreas Görgen as chief operations officer, a newly created role.

But while the operational picture appears robust, the stock market is sending a more muddled signal. At Friday’s close of €81.00, TKMS shares have shed 4.59% over the past 30 days — though they remain up 22.36% year-to-date. The technical picture is equally ambiguous: the stock sits just above its 200-day moving average of €80.88, with a relative strength index of 50.4 indicating neither overbought nor oversold conditions. To gain upside momentum, the share price would first need to clear the €83.20–€85.30 zone, with further resistance stacking up between €98 and €103 before the all-time high of €107 comes into play. That record, set in October 2025, is still roughly 24% above current levels.

The real drama, however, is playing out among analysts, whose views on TKMS have rarely been so polarized. Three houses have published assessments ahead of the third-quarter results due August 12, and their target prices span a staggering €59 range.

At the cautious end, Bernstein Research’s Adrien Rabier rates the stock “Market-Perform” with a €76 price target. He argues that TKMS’s own revenue guidance for 2026 is too conservative given first-half momentum, and expects an EBIT margin of 7% versus the company’s forecast of more than 6%. Deutsche Bank’s Sriram Krishnan takes a more bullish stance, reiterating a “Buy” with a €110 target, citing steady project progress across all divisions. Most optimistic is mwb research, which lifted its price target to €135, dismissing the recent pullback as unjustified and pointing to the bulging order book as a source of exceptional planning visibility.

mwb research backs its conviction with numbers. Revenue, it projects, will climb from €2.17 billion last year to €3.04 billion by 2028, with the growth rate accelerating from 4.3% this year to 19.5% at the end of the forecast period. Operating profit is expected to nearly double from €112.5 million to €224.4 million, pushing the EBIT margin from 5.2% to 7.4%. Earnings per share are seen rising from €1.65 to €2.74, while the dividend could grow from €0.55 to €1.09 over multiple steps.

The analysts agree on one thing: TKMS has likely set its own targets too low. Where they diverge — sharply — is on margin trajectory, the very metric that will determine whether the stock trades at €76 or €135. The August 12 quarterly report will offer the first real test of which camp is reading the tea leaves correctly. For now, the market seems to be waiting for clarity on two fronts: whether Canada’s preferred-supplier designation hardens into a binding contract in the coming months, and how the growing wave of orders translates into the earnings figures due next month.