TAUFKIRCHEN / LONDON (IT BOLTWISE) – Radar specialist Hensoldt is recording impressive growth, driven by increased defense spending in Europe. The company’s shares have gained 160 percent since the beginning of the year, although they recently experienced a price correction. Analysts continue to see potential, particularly due to the increased order intake and the positive development of free cash inflow.
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The Taufkirchen-based radar specialist Hensoldt is currently experiencing an upswing, which is largely fueled by increased defense spending in Germany and Europe. In the first nine months of the year, the company recorded considerable growth, which also had a positive impact on the share price. This rose by 3.5 percent to over 90 euros in early trading, but remains below the record high of 117.70 euros from October. Since the beginning of the year, the share has achieved an impressive gain of 160 percent.
Analysts, including JPMorgan’s David Perry, continue to see potential for the stock despite a recent price correction. However, Perry points out that adjustments to analyst estimates on the occasion of Capital Markets Day on November 11th could put short-term pressure on the stock. Order intake at Hensoldt rose by 8.7 percent to over two billion euros, while the order backlog reached a new high of 7.1 billion euros.
Hensoldt’s sales climbed by 11.6 percent to a good 1.5 billion euros, and adjusted Ebitda rose by 12.8 percent to 211 million euros. Despite a loss of €30 million, free cash flow improved significantly, driven by higher advance payments from customers. Analysts such as Warburg Research’s Christian Cohrs and Jefferies’ Chloe Lemarie praised the company’s earnings progress and positive cash inflow.
For the year as a whole, Hensoldt expects incoming orders to be higher than originally planned and expects a slightly improved profit margin by 2025. Sales could be at the lower end of the forecast at 2.5 billion euros, but are expected to rise to six billion euros by 2030. With around 9,000 employees, Hensoldt is active in areas such as radar technology for the Eurofighter and air defense systems and is involved in projects for the future European air combat system FCAS. Hensoldt supplies the radar system for Rheinmetall’s Skyranger 30 anti-aircraft tank.
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