TKMS Doubles Down on Guidance as Warship Orders Stack Up From Kiel to Ottawa

TKMS raises FY25/26 outlook, shares jump up to 9.2%, backlog hits €20.1B, with Canada and India submarine contracts poised to drive further growth.

The naval shipbuilder's second profit upgrade in six months has landed with the force of a well-aimed torpedo, sending shares to fresh heights and prompting a flurry of analyst revisions. But the real story may lie in what comes next: a pipeline of potential contracts that could dwarf everything the company has booked so far.

TKMS now expects revenue growth of 10 to 12 percent for fiscal 2025/26, a sharp upward revision from the 2 to 5 percent range it had previously flagged. The company also lifted its adjusted EBIT margin outlook to as much as 6.5 percent, up from an earlier projection of just over 6 percent. The market's response was immediate—though the two reporting periods show different snapshots of the same rally. In one session, the stock climbed 4.8 percent to €101.00; in another, it jumped 9.2 percent to €96.40 after briefly trading above the €100 mark.

The momentum extends well beyond a single day's trading. Over the past 30 days, the shares have gained between 17 and 23 percent depending on the measurement window, and the year-to-date advance stands at 46 to 53 percent. The stock remains about 5.2 percent below its 52-week high of €106.58, reached on October 20, 2025—the same day TKMS began trading as a standalone company following its carve-out from Thyssenkrupp, which retains a majority stake.

A Record Order Book With Room to Grow

The upgraded guidance rests on concrete numbers. Revenue for the first nine months of the fiscal year rose 19 percent to just under €1.9 billion, while adjusted EBIT climbed 13 percent to €110 million, up from €98 million in the prior-year period—a margin of 5.8 percent. The order backlog stood at €20.1 billion at the end of the third quarter, which closed on June 30, 2026.

That figure has already grown. After the quarter ended, the German Navy placed an order for four MEKO® A-200 DEU frigates, with an option for four additional vessels. CEO Oliver Burkhard called it the largest surface-ship contract in the company's history. The Bundestag has approved the deal, which adds to an already crowded pipeline.

Beyond confirmed orders, two international mega-projects are drawing particular attention. TKMS has been selected as the preferred bidder for Canada's submarine program, which could involve up to twelve boats based on the U212CD design. The potential value exceeds €15 billion. In India, Burkhard confirmed final contract negotiations for six conventional submarines under Project 75I, with a volume estimated at over $8 billion—though one report puts the figure at around €8 billion for the 3,000-tonne class vessels.

Neither contract has been signed yet, but analysts are already gaming out the implications. Alexander Neuberger of Bankhaus Metzler, who raised his price target from €105 to €115 while maintaining a "Buy" rating, said TKMS could update its medium-term guidance after a Canadian contract is finalized. He described the third-quarter performance as "very solid." Bernstein Research's Adrien Rabier went further, upgrading the stock from "Market-Perform" to "Outperform" and lifting his price target sharply from €76 to €125. Deutsche Bank also raised its target, from €110 to €112, keeping a "Buy" rating.

Competition and Capacity Questions Linger

The optimism is not without its counterweights. Hanwha Ocean of South Korea has not conceded the Canadian submarine program despite TKMS's preferred-bidder status, a reality Burkhard felt firsthand during a visit to Ottawa in July. The competitive pressure underscores that these marquee contracts are not yet sealed.

TKMS has also signed a memorandum of understanding with Spain's Navantia to pool industrial capacity on submarine projects and shorten delivery times—a move that acknowledges the logistical challenges of building so many vessels simultaneously. The global defense boom that TKMS itself cites as a growth driver appears likely to extend well beyond the current fiscal year, but execution will be the test.

For investors, the central question is whether the analysts' optimistic scenarios—built on potential contract wins in Canada and India—will translate into hard numbers in the quarters ahead. The record order book provides the foundation, but the shipbuilder must now prove it can deliver on all fronts at once.