Hensoldt's Record €10.4 Billion Backlog Can't Outrun Rheinmetall's Shadow

Hensoldt closed Friday at €77.78, down 3.8%, as a broad selloff in AI and semiconductor names rippled through the DAX and left European defence stocks exposed. The Munich-based sensor and electronics group had already been under pressure a day earlier, when Rheinmetall's second profit warning of the period pulled the whole sector lower — and Hensoldt with it, despite third-quarter figures that beat consensus on both revenue and adjusted EBITDA.

Nine-Month Numbers Beat the Street

For the first nine months of 2026, Hensoldt reported revenue of €1.86 billion and adjusted EBITDA of €281 million. Order intake reached €3.56 billion, a jump of 76.7%, lifting the order backlog to €10.4 billion. Jefferies analyst Ben Brown flagged that both the top line and adjusted EBITDA had come in above consensus estimates — a detail that did little to arrest the share price decline.

Management also firmed up full-year 2026 guidance on Thursday: revenue of around €2.8 billion and an adjusted EBITDA margin of roughly 19.0%. These are forecasts, not realised results. Hensoldt additionally expects its book-to-bill ratio — order intake divided by revenue — to land at the upper end of its previously indicated range of approximately 1.5x to 2.0x.

Two Banks Converge on €85

Analyst actions on Friday cut in opposite directions but landed on the same number. LBBW trimmed its price target to €85 from €100 while keeping a "Hold" rating, so the lower target came without any change to the underlying recommendation. Exane BNP Paribas moved the other way, lifting its target to €85 from €83 and maintaining its neutral stance. Neither house attached a buy call to its valuation.

The pair sit below two more bullish assessments issued a day earlier. JPMorgan kept Hensoldt at "Neutral" with a €100.0 target following the quarterly release, while Jefferies reaffirmed its "Buy" rating and €98 target. No upgrade or downgrade accompanied any of these moves — each house simply restated its existing view.

Why the Stock Slipped Anyway

The pressure came from several directions at once. n-tv pointed to rising hopes for peace following the US Democrats' election victory and the prospect of cuts to global defence budgets. Changed expectations around US defence spending and disappointment after Hensoldt's own nine-month report added to the drag, according to media reports. dpa-AFX, which described the nine-month figures as solid, attributed the sector-wide weakness to Rheinmetall's guidance cut.

The next confirmed date on Hensoldt's calendar is its Capital Markets Day in London on 10 November — an event that may give investors a clearer read on whether the record backlog can translate into the earnings trajectory the bulls are pricing in.