Bernstein upgraded Thyssenkrupp Marine Systems (TKMS) to Buy from Hold on Tuesday, citing stronger-than-expected third-quarter sales and an improved outlook for the German naval and industrial engineering group.
The brokerage raised its price target to €28 from €21, implying roughly 33% upside from the stock’s last close of €21.00. Bernstein attributed the upgrade to robust order intake and revenue growth in TKMS’s naval shipbuilding and submarine segments, which have benefited from heightened European defense spending amid geopolitical tensions.
The analyst note highlighted TKMS’s position as a key supplier to NATO-aligned navies, including Germany’s fleet modernization programs. Revenue for the three months ended September rose 12% year-over-year, driven by defense contracts and industrial services. Bernstein expects this momentum to continue, supported by long-term procurement cycles in Europe’s defense sector.
Thyssenkrupp’s shares have underperformed broader European industrials in 2024, pressured by macroeconomic uncertainty and delays in some defense projects. The upgrade reflects a shift in sentiment toward cyclical defense names as governments prioritize military spending amid rising geopolitical risks.
Shares of TKMS were up 3.2% in Frankfurt trading after the upgrade, paring some of the year-to-date losses.
