VINCORION’s Post-IPO Rally Faces Its First Real Test as Greenshoe Support Expires

JPMorgan initiates VINCORION with €23.50 target, lifting shares 8%. Defence contractor navigates post-IPO life with strong orders and aftermarket growth.

JPMorgan has thrown its weight behind VINCORION with an “Overweight” rating and a €23.50 price target, sending shares of the defence contractor surging more than 8% in Xetra trading on Wednesday to around €19.11. The endorsement from Wall Street comes at a pivotal moment for the company, which is now navigating life without the stabilisation measures that propped up its stock since its March 20 IPO.

The US investment bank’s analysts see the specialist in mission-critical mechatronics as a structural beneficiary of the long-term investment cycle sweeping Western defence modernisation programmes. VINCORION’s power supply and stabilisation systems for military platforms are in high demand, particularly as NATO members accelerate procurement. The bullish call has pushed the company’s market capitalisation close to €1bn, comfortably above the €850mn valuation at listing.

That valuation now rests on a fundamentally different shareholder base. STAR Capital, the private equity backer that controlled VINCORION before the IPO, has seen its stake fall to 48.63% from 52.82% following the expiry of the greenshoe option. The over-allotment shares have been fully placed, boosting the free float to just over 52% and leaving the stock to find its own level without the support of coordinated purchases by the underwriting banks.

The operating numbers provide a solid floor for the share price. Revenue climbed 18% to €240.3mn in the last financial year, while net profit nearly doubled to €19.4mn from €8.4mn. The order book offers even more comfort: fixed orders stood at €435mn at the turn of the year, but including expected follow-on contracts, the total potential volume is estimated at €1.1bn. Much of that backlog is tied to energy systems for air defence platforms such as the PATRIOT system.

A key structural advantage is the aftermarket business, which now accounts for more than half of group revenue. Maintenance and repair work carries higher margins than original equipment sales and helps smooth out volatility in new orders, giving the company a more predictable earnings profile than many defence peers.

The first real test of VINCORION’s standalone credentials comes on May 7, when CEO Kajetan von Mentzingen presents the inaugural quarterly results as a listed company. The market will be watching operating margins and cash flow closely. Management has guided for full-year revenue of up to €320mn and an operating cash flow of around €38mn. The critical question is whether the company can fund its expansion in mechatronic solutions without tapping equity markets or bank debt — a claim that the first quarterly report will either validate or undermine.