In a renewed political landscape where a Trump administration adopts a more interventionist stance toward Ukraine, the United States sharply increases its military aid—providing advanced tank transmissions, power packs, and suspension systems. This pivot alleviates initial concerns among European allies, but it simultaneously reinforces the imperative for Europe to shore up its own defense capabilities. As a result, Germany, France, and other key NATO members announce incremental budget hikes totaling an additional €30 billion over the next five years, directed toward armored vehicle modernization and naval refit programs.
RENK, as a leading supplier of mission-critical drivetrain and propulsions systems, capitalizes on these twin tailwinds. Its Vehicle Mobility Solutions segment secures three marquee contracts: one from the Bundeswehr for Leopard 2 upgrade kits, one from the Dutch army for Puma spares, and another from Poland for additional chassis orders. Meanwhile, Marine & Industry gear units see double-digit growth as new frigate and patrol vessel programs accelerate, and the Slide Bearings division benefits from refurbished offshore power plants.
We project that, by FY 2029, RENK will have grown revenue at a compound annual rate of 15 %, lifting top-line from €1.14 billion in 2024 to roughly €2.3 billion. Adjusted EBIT margins are expected to expand by 0.5 percentage points annually, from 16.6 % to approximately 19.1 %, driven by scale and mix improvements. Earnings per share will more than double, underpinning a normalization of the P/E multiple: from a premium of ~94x today down to a mid-cycle 25x as growth stabilizes. This scenario—characterized by resilient U.S. support for Ukraine, robust European rearmament, and sustained aftermarket demand—positions RENK as a core defense-growth equity, offering both secular expansion and a path to valuation convergence over the next five years.
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