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MarketFlick Insights
TKMS Stock Surges: Order Books Full and Revenue Forecasts Up
At a glance
- •TKMS has a record order backlog of €22 billion.
- •The company has raised its 2026 revenue forecast to a 2-5% increase.
- •Demand for warships is driven by geopolitical tensions.
- •TKMS shares have increased by 36% this year.
- •The company aims to expand its market reach with successful bids in India and Canada.
Market Analysis
TKMS, the German submarine manufacturer, has announced a record order backlog of €22 billion, prompting an upward revision of its revenue forecast for 2026. Despite recent stagnation in sales and a drop in profits, the company is optimistic about its future prospects. The firm now anticipates a revenue increase of 2% to 5%, compared to the previous forecast of up to 2%. This is largely due to heightened demand for warships, driven by geopolitical tensions, particularly the ongoing conflict in Ukraine and military build-ups across Europe. Since the start of the year, TKMS shares have risen by 36%. With a market capitalization of €5.8 billion, the company is closing in on its former parent company, Thyssenkrupp, valued at €7.1 billion. However, shares dipped 2% at the start of trading on Wednesday.
Business Developments
The companys ability to respond to major global tenders for submarines and naval vessels has improved since its spin-off last year. Successful bids have been placed in countries like India and Canada. CEO Oliver Burkhard stated, "Given current geopolitical developments, our customers' demand for advanced maritime capabilities remains high." TKMS positions itself as the only fully integrated maritime systems supplier in Europe, well-suited to meet industry needs. In the first fiscal quarter, ending in December, TKMS reported revenues of €545 million, a 1% decline compared to the previous year. The adjusted operating profit remained steady at €26 million, with the operating margin slightly improving from 4.7% to 4.8%. However, net profit fell by 85% to just €4 million due to higher taxes and weaker financial results. Order intake plummeted by 83% to €904 million in the first quarter, largely due to an exceptionally high volume of orders in the previous years quarter. Despite this, the current order backlog of around €18.7 billion should keep the company busy well into the 2040s. TKMS continues to navigate the complexities of the defense sector with strategic agility, bolstered by a robust order pipeline and a clear focus on expanding its market reach.
