Last Update 03 Feb 26

Fair value Increased 11%

TKA: Raised Street Views And Asset Sales Will Shape Balanced Risk Profile

The analyst price target for thyssenkrupp has been raised from €10.30 to €11.41, reflecting recent Street research in which firms lifted their targets into the €7.70 to €8.70 range and cited updated views on discount rates, revenue growth, margins and future P/E assumptions.

Analyst Commentary

Bullish Takeaways

Bullish analysts are lifting price targets into a €7.70 to €8.70 range, which points to a reworked view of what they see as fair value for the equity based on their updated models.
The higher targets indicate more confidence in the company meeting the revenue, margin and P/E inputs that now sit behind their valuation work.
Repeated upward target moves, including the €3.50 increase cited by JPMorgan, suggest that bullish analysts see scope for execution to line up more closely with their base case assumptions than before.
The overall move in the analyst price target to €11.41 reflects this cluster of higher individual targets and signals that some on the Street are more comfortable with the risk or discount rate they apply to future cash flows.

Bearish Takeaways

Despite raising targets, some bearish analysts keep cautious ratings such as Underweight, which indicates they still see better risk reward elsewhere even at revised valuation levels.
The combination of higher targets with restrained ratings implies ongoing execution risks, whether on revenue delivery, margin resilience or the ability to support the assumed future P/E multiples.
Maintaining Neutral stances alongside raised targets, as seen in the JPMorgan move to €7.70, highlights that valuation has adjusted but conviction on upside versus risks has not fully shifted.
Investors should read the higher targets alongside these cautious ratings as a reminder that, while the modelled fair value range has changed, analysts still factor in meaningful uncertainties around delivery against those assumptions.

What's in the News

Thyssenkrupp is in talks with India's Jindal Steel about a potential phased sale of Thyssenkrupp Steel Europe. Jindal is conducting due diligence after making an indicative offer for the steel business (Reuters periodical).
The company is considering selling around a 30% stake in its Rothe Erde bearings business in a possible deal that could value the asset at about €1.5b. An adviser has been engaged to test buyer interest, and no outcome is assured at this stage (Key Developments).
Thyssenkrupp provided sales guidance for the 2025 to 2026 financial year, indicating an expected slight sales increase of around 1% (Key Developments).

Valuation Changes

Consensus Analyst Price Target has risen from €10.30 to €11.41, a move of around €1.11 per share.
Discount Rate has edged down slightly from 6.25% to about 6.23%, pointing to a marginally lower required return in the updated models.
Revenue Growth assumptions have been trimmed from roughly 2.75% to about 2.57%, indicating a slightly more cautious top line outlook in the forecasts provided.
Net Profit Margin has moved only marginally, from about 2.34% to roughly 2.35%, suggesting little change in expected profitability per euro of sales.
Future P/E has been lifted from around 9.23x to about 10.22x, meaning analysts are now using a higher earnings multiple in their valuation work.

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Key Takeaways

Strong order backlog and defense tailwinds in Marine Systems, plus a focus on decarbonized steel, position thyssenkrupp for sustainable growth and higher margins.
Structural reforms, segment autonomy, and planned Marine Systems spin-off are expected to boost operational efficiency and unlock previously unrecognized value.
Weak demand, restructuring challenges, reliance on cost-cutting, and underperforming segments threaten profitability, stability, and long-term value creation.

Catalysts

About thyssenkrupp

Operates as an industrial and technology company in Germany and internationally.What are the underlying business or industry changes driving this perspective?

Record order backlog in Marine Systems, driven by large submarine/service contracts and defense modernization trends, positions the segment for sustained revenue growth and earnings visibility, especially as geopolitical tensions support long-term demand for naval solutions.
Continued investments and visible progress in green hydrogen initiatives and DRI plant construction for Steel Europe strategically align the company with rising customer demand and regulatory pressure for decarbonized steel, offering the potential to command premium pricing and improve segment margins.
Successful restructuring actions-such as workforce reductions, consensus on collective agreements in Steel Europe, and ongoing APEX 2.0 efficiency initiatives-are expected to drive operational cost savings, aiding both net margin expansion and positive cash flow even in soft demand environments.
The spin-off and impending separate listing of Marine Systems, together with planned segment autonomy across the portfolio, may unlock hidden asset value and improve transparency, supporting higher group valuation and better resource allocation, with positive effects on return on capital employed and earnings.
Temporary softness in green/Decarbon Technologies bookings is expected to recover over the next two years as regulatory clarity and financing for global green infrastructure improves, reactivating robust project pipelines and supporting group revenue acceleration.

thyssenkrupp Earnings and Revenue Growth

thyssenkrupp Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming thyssenkrupp's revenue will grow by 3.5% annually over the next 3 years.
Analysts assume that profit margins will increase from -3.7% today to 4.0% in 3 years time.
Analysts expect earnings to reach €1.5 billion (and earnings per share of €2.38) by about September 2028, up from €-1.2 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 4.6x on those 2028 earnings, up from -4.7x today. This future PE is lower than the current PE for the GB Metals and Mining industry at 19.2x.
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 5.45%, as per the Simply Wall St company report.

thyssenkrupp Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent macroeconomic headwinds, including weak demand and lower price levels across core segments (Steel, Materials Services, Automotive Technology), are contributing to significant year-over-year sales declines, weakening topline growth prospects and potentially leading to structurally lower revenues.
Ongoing restructuring, workforce reductions, and large restructuring provisions (notably in Steel and Automotive) highlight the company's continuous struggle with operational inefficiencies and high fixed costs, which risk eroding future net margins and profitability.
The Decarbon Technologies segment, while positioned for future growth, currently faces a contracting book-to-bill ratio (~0.7x), indicating slowing order intake and project delays due to uncertain regulatory environments and high interest rates; this could undermine medium-term earnings and cash flows.
Dependence on cost-cutting, claims management, and provision releases to achieve short-term earnings guidance raises concerns about the sustainability of EBIT improvements, making earnings growth highly volatile and susceptible to future revenue shortfalls.
High levels of capital employed in underperforming segments such as Material Services, coupled with questionable returns on capital and ongoing cash outflows, risk constraining group-wide capital allocation and limiting the potential for long-term shareholder returns and stock appreciation.

Valuation

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

The analysts have a consensus price target of €9.35 for thyssenkrupp 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 €13.0, and the most bearish reporting a price target of just €6.3.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €37.0 billion, earnings will come to €1.5 billion, and it would be trading on a PE ratio of 4.6x, assuming you use a discount rate of 5.5%.
Given the current share price of €9.27, the analyst price target of €9.35 is 0.9% higher. 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.

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