Last Update 21 Dec 25

Fair value Increased 2.01%

SHA0: Margin Gains From Robotics Partnership Will Likely Prove Unsustainable

Analysts have nudged their price target on Schaeffler modestly higher, citing incremental improvements in fair value to EUR 7.10. This is driven by slightly faster expected revenue growth, a small uplift in profit margins, and a marginally lower discount rate.

Analyst Commentary

Recent research indicates a cautiously constructive stance on Schaeffler, with incremental upward revisions to price targets and a maintained neutral rating. Analysts are balancing signs of operational progress against lingering structural and macroeconomic risks.

Bullish Takeaways

Bullish analysts view the higher price target as recognition of improving earnings visibility, supported by stabilizing end markets and disciplined cost control.
Moderate target upgrades suggest confidence that execution on efficiency programs can gradually lift margins toward sector averages, supporting a higher fair value range.
The unchanged neutral rating, despite a higher target, signals belief that near term downside risk has eased, with a more balanced risk reward profile than earlier in the year.
Incremental optimism reflects expectations that the current valuation already discounts many cyclical headwinds, leaving room for upside if demand normalizes faster than anticipated.

Bearish Takeaways

Bearish analysts point to the relatively modest size of the target increase as evidence that structural challenges and execution risks still cap rerating potential.
The decision to maintain a neutral stance implies limited conviction in a rapid acceleration of growth, particularly in more cyclical segments of the portfolio.
Concerns remain that any margin improvements could prove fragile if input costs re accelerate or pricing power weakens, constraining upside to valuation.
Some see the share price as fairly reflecting current fundamentals, suggesting that further appreciation will require clear evidence of sustained free cash flow improvement.

What's in the News

Schaeffler forms a long term technology partnership with Neura Robotics to co develop and supply key components, including innovative planetary gear actuators, for humanoid robots and plans to deploy a mid four digit number of humanoids across its global production network by 2035 (Key Developments).
The collaboration with Neura Robotics will generate real world production and interaction data that feed into the Neuraverse cognitive ecosystem, accelerating AI training and development of industrial robotics skills for future factory environments (Key Developments).
Schaeffler expands its OPTIME smart lubrication ecosystem with the new FAG OPTIME C4 multi point lubricator, which can independently supply up to four lubrication points at higher pressure and volume to reduce bearing failures and maintenance errors (Key Developments).
The FAG OPTIME C4, available to order from September 25, 2025 in most major regions, builds on the earlier OPTIME C1 launch to offer a more flexible, app controlled solution for condition monitoring and smart lubrication across diverse drive systems (Key Developments).

Valuation Changes

Fair Value has risen slightly from €6.96 to €7.10 per share, reflecting a modest uplift in the intrinsic value estimate.
Discount Rate has edged down marginally from 8.25 percent to 8.24 percent, providing a small tailwind to the discounted cash flow valuation.
Revenue Growth has increased slightly from about 4.41 percent to 4.46 percent, indicating a marginally stronger top line outlook.
Net Profit Margin has improved modestly from around 5.71 percent to 5.77 percent, signaling incremental expectations for profitability.
Future P/E has moved up fractionally from roughly 5.00x to 5.04x, suggesting a slightly higher implied earnings multiple in forward estimates.

Expansion in electrified mobility and adoption of high-value, energy-efficient components are driving revenue growth, gross margin improvement, and premium segment positioning.
Enhanced scale, cost efficiency, and growing aftermarket services are set to boost earnings quality, net margins, and recurring revenue streams.
Heavy reliance on legacy segments, margin pressures, and elevated costs from restructuring expose Schaeffler to risks amid electrification shifts and limited flexibility for investment or growth.

Catalysts

About Schaeffler

Develops, manufactures, and sells components and systems for industrial applications in Europe, the Americas, China, and the Asia Pacific.What are the underlying business or industry changes driving this perspective?

Strong growth in E-Mobility (+10% sales in Q2, substantial outperformance vs. BEV market, and high quality/order intake like the new Chinese NEV contract) signals Schaeffler is successfully capitalizing on the shift to electrified mobility, which should drive top line expansion and improved gross margins.
Adoption of energy-efficient, high-value components (example: wind business growth in China, emerging strength in aerospace bearings, and ongoing order intake for industrial automation) positions Schaeffler to benefit from global carbon-reduction and energy efficiency trends, supporting both revenue growth and margin resilience as demand shifts toward premium products.
The accelerating mix shift to E-Mobility and hybrid systems, combined with significant order intake (notable book-to-bill strength in HEV) and synergies from the Vitesco merger, is expected to increase scale and drive both revenue diversification and margin expansion over the next few years.
Ongoing cost efficiency and capital allocation discipline (synergy realization ahead of plan, shrinking capital employed, and strict capex/workforce management) are set to boost net margins and free cash flow, with additional upside as transformation-related one-offs subside.
Growth in aftermarket and digital service businesses (noted for highest margins and recurring revenues within Vehicle Lifetime Solutions), along with rising industrial demand in selected segments, is likely to enhance earnings quality and support operating margin improvement through increased contribution from higher-margin and recurring revenue streams.

Schaeffler Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Schaeffler's revenue will grow by 7.7% annually over the next 3 years.
Analysts assume that profit margins will increase from -3.9% today to 5.1% in 3 years time.
Analysts expect earnings to reach €1.4 billion (and earnings per share of €1.01) by about September 2028, up from €-852.0 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 4.8x on those 2028 earnings, up from -6.2x today. This future PE is lower than the current PE for the GB Auto Components industry at 13.3x.
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 8.52%, as per the Simply Wall St company report.

Schaeffler Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Exposure to declining internal combustion engine (ICE) powertrain demand remains a significant risk, as the Powertrain & Chassis division experienced falling sales and continues to be highly dependent on mature European OEMs, making future revenues vulnerable to the accelerating shift toward electrification.
Margin pressures from negative mix (with E-Mobility growing but still not covering fixed costs, and legacy segments declining) and persistent foreign exchange headwinds have already diluted group profitability, implying continued risks to net margins until the E-Mobility business reaches scale.
Schaeffler's high share of sales to European OEMs (e.g., Volkswagen, Mercedes, Stellantis) exposes it to regional cyclicality, greater bargaining power among consolidating automakers, and price competition, which may cause volatile or shrinking revenues and earnings, especially as procurement dynamics shift.
Increased R&D intensity in stagnating or shrinking segments such as chassis and ICE/hybrid platforms reflects high operating costs without commensurate sales growth, risking inefficient capital allocation and pressuring net margins if innovation does not translate into outsized market share gains.
Ongoing restructuring, integration costs following the Vitesco merger, and elevated debt levels (with leverage ratio above long-term target, and free cash flow suppressed by one-off costs) may constrain Schaeffler's ability to invest, maintain dividend growth, or respond to new market disruptions, limiting upside for earnings and shareholder returns.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €5.536 for Schaeffler 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 €7.5, and the most bearish reporting a price target of just €4.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €27.2 billion, earnings will come to €1.4 billion, and it would be trading on a PE ratio of 4.8x, assuming you use a discount rate of 8.5%.
Given the current share price of €5.56, the analyst price target of €5.54 is 0.4% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
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.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Lift Schaeffler Price Target as Valuation Rises Despite Revised Growth Outlook