Global Urbanization And Infrastructure Buildout Will Drive Market Resilience

Key Takeaways

• Strategic focus on core transport, hydraulics, and agriculture segments plus successful Hyva integration is improving margins and operational efficiency.
  
• Expanding global presence and benefiting from modernization trends in logistics, positioning for resilient, long-term revenue and earnings growth.
  
• Reliance on acquisitions and non-recurring gains masks core business stagnation, while exposure to regional, currency, and industry risks threatens long-term earnings and stability.

Catalysts

Manufactures and supplies safety-critical systems for the commercial vehicle industry in Germany, Europe, North America, Asia, Pacific, and Africa.

• The company's successful long-term contracts with global agricultural OEMs (CNH, AGCO, John Deere) and recent market share gains, especially in APAC and South America, position JOST Werke to benefit from ongoing urbanization and infrastructure buildout in emerging markets-supporting sustained future revenue growth.
  
• The integration of the Hyva acquisition is on track and already generating synergy effects, with full synergy potential (€20+ million run-rate by end of 2026) yet to be realized; this should result in improved margins and higher EBITDA/Earnings in the coming years as operational efficiency increases.
  
• The strategic disposal of the noncore cranes business allows management to focus resources on core high-value segments (transport, hydraulics, and agriculture), advancing a shift to higher-margin, value-added offerings and digital solutions-likely to boost average selling prices and support gross margin expansion.
  
• JOST's diversified global footprint, with decreased reliance on Europe and a growing presence in the Americas and APAC, has created a more resilient revenue base, reducing both cyclical and regional risk and supporting long-term revenue stability.
  
• Secular trends favoring the modernization of logistics fleets (stricter safety/efficiency regulations and rising demand for durable, innovative parts due to global e-commerce growth) are expected to drive increased demand for JOST's advanced coupling and axle solutions-providing an ongoing tailwind for top-line and earnings growth.

JOST Werke Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming JOST Werke's revenue will grow by 14.9% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.1% today to 6.1% in 3 years time.
• Analysts expect earnings to reach €115.2 million (and earnings per share of €6.03) by about August 2028, up from €37.9 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.4x on those 2028 earnings, down from 20.6x today. This future PE is lower than the current PE for the GB Machinery industry at 19.3x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.69%, as per the Simply Wall St company report.

JOST Werke Future Earnings Per Share Growth

Risks

• Despite reported top-line growth from the Hyva acquisition, underlying organic sales declined by 3% in Q2 and by 6.5% for the first half of the year, indicating that JOST Werke's core business is stagnating or contracting, which may undermine sustainable revenue and earnings growth if this trend continues.
  
• The company's profitability is currently being supported by merger-related synergies, discontinued operations (the cranes business), and positive non-recurring factors, while core organic earnings are facing headwinds from slowing demand, particularly in North America and parts of APAC; these tailwinds are not guaranteed to persist, risking pressure on net margins and earnings.
  
• High exposure to economic and policy volatility in key regions, especially the significant contraction and ongoing uncertainty in the U.S. market due to tariff policies and economic softness, creates material risk to JOST Werke's future revenues and could lead to sustained underperformance in its largest profit contributor region.
  
• Currency headwinds (notably USD weakness against the Euro) and a growing impact from acquisition-related purchase price allocations (PPA), such as trademark depreciation and inventory step-ups, are reducing reported net income and ROCE, with the impact expected to grow (€28 million in 2025, ~€50 million in 2026), which could weigh on future earnings per share and overall return on capital.
  
• JOST Werke's improving resilience is partly due to diversification and aftermarket strength, but its ability to offset industry-wide secular headwinds, such as slowing traditional commercial vehicle demand (amidst electrification and modal shift to rail), and a mixed outlook in core end markets remains unproven; adverse shifts in these structural trends could threaten long-term revenue and margin stability.

Valuation

• The analysts have a consensus price target of €68.4 for JOST Werke based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €82.0, and the most bearish reporting a price target of just €57.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €1.9 billion, earnings will come to €115.2 million, and it would be trading on a PE ratio of 10.4x, assuming you use a discount rate of 7.7%.
  
• Given the current share price of €52.4, the analyst price target of €68.4 is 23.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.