Hensoldt’s Operating Profit Jumps 47% in Q1 as Record €9.8 Billion Backlog and Canadian Tank Order Fuel Rally

Defense electronics specialist Hensoldt jumps above €90 after Q1 revenue rises 26%, backlog hits €9.8B, and it joins an AI satellite consortium; valuation concerns linger with forward P/E near 40.

Hensoldt shares stormed above the psychologically significant €90 mark this week, capping a 22% weekly advance as a stream of positive catalysts – from a sharp improvement in operating profitability to a fresh tank spares contract with Canada – reinforced confidence in the defense electronics specialist. The stock has now detached decisively from its 50-day moving average of around €78 and, more importantly, breached the 200-day line that had capped earlier rallies.

The numbers for the first quarter of 2026 tell a clear story of operational momentum. Revenue surged by 26% year-on-year to €496 million, while adjusted operating profit climbed 47% to €44 million, lifting the margin from 7.6% to 8.9%. The Optronics segment led the way, benefiting from better execution and industrial ramp?up. On a reported basis, however, Hensoldt still recorded a per-share loss of €0.16, narrowing from a loss of €0.26 in the year?ago period.

Behind those quarterly results lies an order backlog that has swelled to a record €9.8 billion, providing rare multi-year visibility in a cyclical industry. That backlog received an extra lift last week when the Canadian Armed Forces placed a €10 million order for spare parts for their Leopard 2 battle tanks, including commander periscopes and advanced thermal imaging systems. The deal underscores Hensoldt’s role as a key supplier to the global Leopard user community.

Adding to the positive news flow, Hensoldt joined a consortium – alongside OHB, Helsing and Norway’s Kongsberg Defence & Aerospace – to bid on the German military’s “Spock 2” project, an AI?powered, satellite?based surveillance and targeting system. Airbus Defence and Space recently noted that integrating Hensoldt’s Mk1 radar into new combat systems could generate cost savings of more than 40%, a remark that boosts the consortium’s pitch.

Shareholders on the same day approved a dividend of €0.55 per share for the 2025 financial year, with analysts already penciling in a rise to €0.69 for 2026. The German government, which has held a 25.1% stake since 2021, affirmed its strategic commitment to the company.

Despite the upbeat mood, valuation concerns are creeping in. The forward P/E ratio has climbed to roughly 40, and the average analyst price target now stands at €91.17 – just 6% above the current level. Among individual ratings, DZ Bank maintained its buy recommendation while nudging its target down to €98, citing structural demand in European defense. Barclays kept its “neutral” rating with a €95 target, and JPMorgan set a fair value of €85, warning of cyclical risks in land-vehicle procurement programs if budgets tighten.

Management left its full-year guidance unchanged, targeting sales of around €2.3 billion for 2026 and an operating margin between 18% and 19%. A separate, more ambitious revenue figure of roughly €2.75 billion has also been floated – possibly reflecting an upside scenario tied to accelerated order fulfillment. Beyond the current year, Hensoldt aims to reach €6 billion in revenue by 2030. The next major check?point will be the release of second?quarter results on 31 July, when investors will look for evidence that the margin recovery is sustainable and the backlog continues to translate into cash flow.