Market Sells Off Renk Despite Record Order Book and CEO's Extended Mandate

Defence supplier Renk posts record Q1 orders and double-digit profit growth, yet shares hit 2025 low amid defence sector rotation. CEO extended through 2032 as board seeks stability.

For a company posting record order intake and double-digit profit growth, the treatment Renk Group is receiving from the stock market is anything but rewarding. While the defence supplier’s operational engine hums, its share price has been cut nearly in half from October’s record and tumbled to a fresh 2025 low on Tuesday.

In a move designed to steady the ship, Renk’s supervisory board has handed CEO Dr. Alexander Sagel an early contract extension through March 2032, adding five years to his tenure. The vote of confidence comes as the board attempts to insulate the company from a sell-off that has wiped roughly 19% off the stock since the start of the year.

The quarterly numbers Sagel delivered hardly look like those of a company in distress. First-quarter net profit surged to €15.4 million, a multiple of the prior-year figure. Adjusted operating profit climbed by a double-digit percentage to €42.4 million, pushing the corresponding margin to 15%. Order intake hit around €582 million, the best start to a year in the group’s history, and the backlog swelled to a record nearly €7 billion.

A major driver of that order book is the US military. Through its subsidiary RENK America, the company is developing autonomous capabilities for tracked vehicles, including a drive-by-wire system for the US Army’s Armored Multi-Purpose Vehicle programme in partnership with BAE Systems. Renk’s transmissions already power every medium-weight tracked vehicle in the American forces.

But none of that operational strength has arrested the slide in the equity. The stock closed Tuesday’s Xetra session at €44.73, a new low for 2025 and a far cry from the all-time high reached last October. Analysts chalk up the weakness to a broader market rotation away from defence names, fuelled by a fragile ceasefire in Iran and rising oil prices that have rattled sentiment across the sector.

The sell-off looks overdone to many on the Street. Warburg Research reiterated its buy recommendation after the earnings release, with analyst Christian Cohrs expecting Renk to reach the upper end of its annual guidance. The consensus target among 14 analysts sits at roughly €68, implying an upside of more than 50% from Tuesday’s close.

Management is sticking to its full-year forecast of revenues well above the billion-euro mark. Meanwhile, shareholders will be watching June 11, when the stock goes ex-dividend with a proposed payout of €0.58 per share. The next operational update is due on August 6 with second-quarter results.