Thyssenkrupp's Steel Re-Rating Collides With Post-Rally Profit-Taking

Bank of America lifts Thyssenkrupp price target to €22, citing EU steel import quotas and steel division worth €4-5B, despite shares sliding 8% from highs.

The arithmetic behind Bank of America's latest call on Thyssenkrupp is striking: a steel division potentially worth €4–5 billion in equity value, against a parent-company market capitalization of just €8.67 billion. That disconnect helps explain why the bank lifted its price target to €22 from €19 on Thursday while keeping a buy rating — even as the shares themselves slid deeper into the red.

The stock closed the session at €12.68, down 2.9% on the day and 8.2% below its level a week earlier. The pullback extends a wobble that began after the shares touched €14.05 — a 52-week high — just three days prior. On Thursday alone, the decline reached 3.9% at one point, with the shares changing hands at €12.60. Measured against that recent peak, the stock now sits roughly 9.8% lower, though it remains up about 36% since the start of the year. The monthly picture still shows a 4.1% gain, and the annualized 30-day volatility reading of around 40% underscores just how much momentum has built up — and how quickly it can unwind.

The EU Quota Math

At the heart of BofA's revised thesis is the European Union's steel import quota, in force since July. With tariffs of €80–100 per tonne applied to shipments exceeding the quota, and an import volume of 8.5 million tonnes in scope, the potential relief for domestic producers amounts to as much as €850 million. That shifts the competitive balance in Europe decisively toward homegrown mills — Thyssenkrupp among them.

The bank's analysts see the steel business generating EBITDA potential of €1.25–1.5 billion, a figure that should become clearer at the division's capital markets day on September 28. Cost measures support the case: a sweeping headcount reduction in the steel unit, plus the planned exit from the Krupp Mannesmann (HKM) joint venture, which is expected to lighten the balance sheet by €300–350 million annually. A supply agreement, however, keeps Thyssenkrupp tied to certain purchase obligations until 2028.

Operational Milestones and a Fresh Headwind

The strategic overhaul has a tangible industrial counterpart. In April, Thyssenkrupp Steel received final acceptance from plant builder Primetals Technologies for the modernized continuous caster No. 4 in Duisburg. The facility processes up to 2.3 million tonnes of steel per year, geared toward premium grades such as high-strength multi-phase steels and materials for electric vehicles. At peak, roughly 1,000 workers were involved in the conversion — an investment that aligns with the higher-value product strategy underpinning BofA's upgraded target.

The latest quarterly numbers, released August 13, showed group revenue up 8% to €8.8 billion, with adjusted EBIT of €183 million against €155 million a year earlier. That missed the consensus forecast of €207 million, yet the bottom line swung back into positive territory: net income of €34 million, compared with a €255 million loss in the prior-year quarter. Management narrowed its full-year guidance to adjusted EBIT of €600–900 million, while projecting a 1–3% decline in revenue.

Not everything is cooperating. The Bundesbank warned Thursday that low water levels on German waterways could noticeably brake the economic recovery in the third quarter, with output likely to rise only modestly at best. For Thyssenkrupp, that is not an abstract concern: the group needs up to 60,000 tonnes of coal and ore daily and has already halted its own inland shipping operations due to the low-water situation. Logistical bottlenecks could push up operating costs in the near term, even as structural improvements in steel play out over the medium term.

Breakup Momentum Continues

The corporate restructuring, meanwhile, is advancing on schedule. Shareholders approved the spin-off of the materials division tk accelis with 99.99% of votes cast, with a listing planned for late October 2026. Investors will receive one share in the new company for every 20 Thyssenkrupp shares they hold, while the parent retains 51% and control for now. The HKM stake sale to Salzgitter AG has also been completed. These steps follow the earlier separation of the submarines business TKMS and fit the blueprint of CEO Miguel López to slim down the former conglomerate into more autonomous units.

One persistent drag remains: the separately listed electrolysis subsidiary Thyssenkrupp Nucera, where the parent's majority stake means its troubles continue to cast a shadow over the mother share. Whether the current setback amounts to a brief pause or a deeper correction should become clearer in the sessions ahead, with the tk accelis listing the next concrete catalyst on the horizon.