Thyssenkrupp's Green Steel Gambit and a Tighter Forecast Put a Floor Under the Rally

Thyssenkrupp narrows FY EBIT guidance, advances EU talks on green steel funding, but stock at 52-week high leaves little room for error.

The arithmetic of Thyssenkrupp's recovery is getting easier to follow, even if the stock's trajectory is starting to look stretched. With the shares trading at €14.85 — barely 0.7 percent shy of their 52-week high — the market has already priced in a substantial chunk of the good news. The question now is whether the operational momentum can keep pace with the enthusiasm.

A Narrower Band, a Clearer Signal

The numbers released on August 13 did the heavy lifting. Management lifted the floor on its full-year adjusted EBIT guidance for fiscal 2025/26, narrowing the range from €500–900 million to €600–900 million. That is more than a cosmetic tweak — it signals genuine confidence in the underlying trajectory. The expected group loss range also tightened, from €800–400 million to €700–400 million.

The third quarter backed up the optimism. Revenue came in at €8.8 billion, with adjusted EBIT of €183 million and a net profit of €34 million — a slender margin that underscores just how thin profitability remains across large parts of the conglomerate. Over the first nine months, revenue accumulated to €24.4 billion. Yet the free cash flow picture tells a more cautious story: at minus €114 million before acquisitions, the operating recovery has not yet translated into liquidity.

Brussels Talks Ease the Biggest Overhang

Alongside the quarterly figures came a second catalyst that may matter more for the long-term valuation. Reuters reported that Thyssenkrupp is in advanced discussions with the European Commission over revised funding terms for its €3 billion green steel plant in Duisburg. The original subsidy package was tied to hydrogen usage — conditions the CFO now admits are unrealistic in the current environment.

That admission marks a notable shift for a company that has long cast itself as a flagship of the green transition. The pragmatism is telling: the decarbonisation strategy is becoming less ideological and more workable, which arguably improves the project's odds of completion. For investors, the prospect of reduced regulatory uncertainty around one of the group's central transformation bets was enough to push the stock up as much as 7.5 percent on the day.

Analysts Split on Where the Ceiling Sits

The post-results analyst reaction has been anything but uniform. Deutsche Bank Research reaffirmed its buy rating with a €16 price target, while Bank of America went a step further, lifting its target from €18 to €19 on the same day. On the more cautious end, JPMorgan held at neutral with a €12.80 target — set on August 13 and now well below the current price — and Jefferies kept its buy rating but at a comparatively modest €13.

That spread of nearly seven euros between the highest and lowest targets reflects a genuine disagreement about how much of the turnaround is already reflected in the share price. The stock has climbed 22 percent over the past month, 59 percent year to date and 65 percent over twelve months — a run that far exceeds what the guidance revision alone would justify. The distance from the 200-day moving average sits at 43 percent, and the RSI at 71.5 points to short-term overbought conditions, though such technical signals are best treated as a footnote rather than an investment thesis.

A Rally That Leaves Little Room for Error

The combination of a raised forecast, progress in Brussels and broadly favourable analyst commentary has carried the shares to within touching distance of their yearly peak. But the very speed of that ascent leaves the stock vulnerable to a pullback. For existing holders, the operational improvements are real and documented, and the easing of the green steel financing overhang removes some of the sharpest edges from the risk profile. For newcomers, the calculus is different: a meaningful portion of the positive narrative is already embedded in the price, and the next decisive test — whether free cash flow can escape negative territory — has yet to be passed.