On Tuesday, Deutsche Bank (ETR:DBKGn) analysts adjusted their outlook on Knorr-Bremse AG (KBX:GR), a leading manufacturer of braking systems for rail and commercial vehicles. The price target for the company’s stock was increased to EUR85.00 from EUR80.00. Despite the adjustment, the firm maintained its Hold rating on the stock.
The revision in the price target to EUR85.00 from EUR80.00 by Deutsche Bank reflects a positive view of Knorr-Bremse’s potential to benefit from Germany’s infrastructure plan. The analyst noted that although there is a slight reduction in earnings per share (EPS) estimates due to foreign exchange impacts, the increase in the target price is mainly due to the recent rise in multiples for German industrial companies.
Knorr-Bremse is scheduled to announce its first-quarter results on May 8. Deutsche Bank forecasts Q1 orders to be around EUR2,134 million, which represents a 1% year-over-year increase. Revenue is expected to be slightly down by 1% to EUR1,955 million. However, the earnings before interest and taxes (EBIT) are projected to be EUR240 million, with a margin improvement of 20 basis points to 12.3% compared to the previous year.
The analyst anticipates that Knorr-Bremse’s management will reiterate its full-year 2025 guidance, which projects revenue in the range of EUR8.1 to EUR8.4 billion and a margin between 12.5% and 13.5%. Within the company’s divisions, the Rail Vehicle Systems (RVS) is expected to see continued steady demand and margin improvements throughout the year. Meanwhile, the Commercial Vehicle Systems (CVS) division is currently experiencing challenging market conditions, but revenue and margins are expected to improve in the second half of the year.
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