Thyssenkrupp's Steel Spin-Off Gets a Foundation Backer as JPMorgan Lifts Its Target

The Krupp Foundation has thrown its weight behind plans to make Thyssenkrupp's steel division a standalone entity, with chairwoman Ursula Gather telling Reuters she could even picture taking a stake in the separated business. Her comments, reported Monday, offer shareholders a signal of institutional support for the conglomerate's restructuring — though they stop well short of a binding commitment.

Support, Not a Signed Deal

Gather described the current moment as a favorable window for spinning off the steel operations, and said the foundation backs that path. Her openness to holding equity ties endorsement of the plan to the prospect of a possible financial commitment down the road.

That distinction matters. Gather floated a potential stake; she did not announce an agreed entry. Nothing in her remarks confirms a completed transaction or fixes the ownership structure of a future independent steel company. Still, for anyone tracking the group's overhaul, the message carries weight: the foundation's backing covers not just the separation itself but the idea of remaining attached to a standalone steel business as a shareholder. It is a perspective on the reorganization, not proof that it has been carried out.

A Steer-by-Wire Handshake on the Auto Side

Thyssenkrupp's automotive arm is meanwhile pursuing a different route — partnership rather than separation. Thyssenkrupp Automotive Technology and Inovance Automotive have agreed a strategic cooperation on steer-by-wire, with the two firms set to develop solutions in that field jointly.

The two tracks now sit side by side: a possible organizational carve-out in steel, and a signed development partnership in automotive. The Inovance deal should not be read as finished, market-ready products — its subject is joint development work.

Shares in Thyssenkrupp rose 2.1% on Monday. Pinning that gain squarely on either the partnership or the foundation's comments would not be justified.

JPMorgan Raises Its Target, Keeps Its Rating

Analyst positioning also calls for nuance. JPMorgan lifted its price target on Thyssenkrupp to EUR 17 from EUR 15 on Monday, while leaving its rating at "Neutral." A higher target, in other words, does not amount to a buy recommendation.

Dominic O'Kane of JPMorgan sees limited room for positive earnings surprises in European steelmakers' upcoming quarterly reports. At the same time, he views the entry point ahead of expected steel price increases and an acceleration in profits as attractive — an acceleration he expects in the fourth quarter of 2026 and in 2027.

The raised target therefore directs attention beyond the imminent results. Investors should not confuse the change with a greater likelihood of near-term earnings beats; on that front O'Kane stays cautious. The unchanged rating also caps how positive the news is for Thyssenkrupp. At EUR 13.84, the stock trades below the new target, laying bare the gap between market valuation and analyst expectations — without substituting for a buy call.

A Sector Forecast Is Not a Company Forecast

For EU steelmakers, JPMorgan projects a 35% rise in operating profit before interest, taxes and depreciation next year. The year after, growth is expected to reach 50%, in each case measured against 2026.

Those expectations concern the sector and are not a specific earnings forecast for Thyssenkrupp. Keeping that separation in mind is essential when reading the target increase: a friendlier industry picture cannot simply be transferred, unchanged, onto a single company's results.

As support for its sector view, JPMorgan cites higher hot-rolled coil prices and declining imports. Hot-rolled coil prices have climbed roughly 10% since July, according to the bank, while steel imports into the EU fell 48% in July under the new quota system.

The Steel Overhaul Remains Its Own Test

Beyond the anticipated sector recovery, Thyssenkrupp still faces the restructuring of its steel business. According to media reports, a restructuring agreement envisages cutting steel production capacity. Output and headcount are to shrink substantially, with thousands of jobs affected. Weak demand, high costs and import competition are cited as the reasons.

Investors thus confront two separate developments: the prospect of better sector earnings and the company-specific overhaul. Monday's target increase strengthens the valuation case. That JPMorgan nonetheless stays at "Neutral" is the equally important caveat — a higher price target alone does not signal an unreservedly optimistic view of the stock.