Renk’s Record €6.9 Billion Backlog Shields a 29% Share Decline as Short Sellers Circle

Defence contractor Renk posts record Q1 orders and backlog, but short sellers bet on export restrictions and delays, pushing stock 50% below October highs.

The Augsburg-based defence contractor Renk Group heads into its presentation at the International Investment Forum on Wednesday with a curious split personality. On the operational front, business is firing on all cylinders — record order intake, rising profitability and a backlog that stretches years ahead. Yet the stock has been slashed by almost half since October, and two prominent hedge funds have built bearish bets against it. Management must now convince investors that the market has got the pricing wrong.

Citadel Advisors recently disclosed a net short position of 0.5% in Renk, while PDT Partners lifted its own short from 0.79% to 0.84%. The pair are wagering that political headwinds and execution delays will keep the shares under pressure. Not everyone is bailing out: BlackRock increased its voting rights to 4.44%, betting on the structural growth story in European defence spending. The stand-off between shorts and long-term bulls is becoming the defining feature of Renk’s stock.

The Q1 numbers give the optimists plenty of ammunition. Order intake jumped 6.1% to €582 million — the best first quarter in the company’s history. The cumulative order book now stands at roughly €6.9 billion, providing a sturdy revenue cushion for the next several years. Adjusted EBIT climbed to €42.4 million, with the operating margin improving to 15%. More than 90% of the planned €1.5 billion-plus full-year revenue is already locked in via firm orders and framework agreements.

Yet the share price tells a different story. At Tuesday’s close of €45.67, Renk trades nearly 50% below its October record high and has shed 29.49% over the past twelve months. The last session brought a 2.51% bounce to €46.63, but on a monthly basis the loss still stands at 15.05%. Chart technicians note the stock is now 10.56% below its short-term moving average and a hefty 21.72% short of the 200-day line. The 52-week trough of €43.91, touched in mid-May, offered only a shallow floor.

Short sellers have concrete reasons for their bearish posture. Renk supplies components for Israeli armoured vehicles, and potential export restrictions threaten up to €100 million in revenue this year. Separately, roughly €200 million in sales originally booked for the prior year have slipped into the first half — a delay that the market is heavily discounting. Management is holding firm on its yearly guidance despite these hiccups, but the uncertainty is plainly weighing on sentiment.

To stabilise the narrative, the board has moved to shore up leadership. CEO Dr. Alexander Sagel saw his contract extended by five years through 2032, ensuring continuity for the growth strategy. The annual general meeting on 10 June will also see a change at the top of the supervisory board: Dr. Klaus Richter is set to take the chair, succeeding Claus von Hermann, who is stepping down voluntarily. A dividend proposal of €0.58 per share for the 2025 financial year will be put to a vote.

Long-term ambitions remain bold. Renk is targeting revenue of €2.8 billion to €3.2 billion by 2030, roughly double last year’s €1.37 billion. The defence share of group sales is expected to rise to around 90%, aligning perfectly with Europe’s rearmament push. But the entire sector has undergone a sharp correction in May, as profit-taking followed an extended rally and questions emerged about the pace of future budget increases.

Wednesday’s forum slot — a 30-minute presentation followed by Q&A — is therefore far from routine. Renk’s management can point to a record order book, double-digit earnings growth and a strengthened leadership team. The challenge is to make those facts resonate with a market that has so far chosen to look at the risks rather than the runway.