Deutsche Bank Research Sticks With 'Buy' for Hensoldt, Sets €37 Price Target
Frankfurt Stock Exchange
Boerse.de
Deutsche Bank research analyst Michael Briest last Tuesday reiterated his "buy" call on the German defense electronics group Hensoldt AG, keeping his price target at €37.
The Frankfurt-listed company was downgraded from "buy" to "hold" by Goldman Sachs analyst Ahmed Khalil a week earlier, with the latter citing that Hensoldt's valuation is "no longer compelling." Khalil's action followed Hensoldt reporting a 20% revenue increase in the first half of this year.
Deutsche Bank's Briest, on the other hand, believes that the company's growth opportunities, particularly in the radar business, coupled with solid financials make up for the stock's recent price run.
Here is what Briest had to say about Hensoldt:
- Hensoldt's balance sheet is strong, and it has very low leverage and ample liquidity, which will allow it to pursue growth opportunities.
- The company's order book is growing, and it has recently won a number of large contracts, including a €1.2 billion deal to supply radar systems to the German military.
- Hensoldt is a global leader in radar technology, and it is well-positioned to benefit from the growing demand for radar systems in the defense and aerospace markets.
Briest said that he expects Hensoldt to continue to grow in the coming years, driven by its strong order book and its leadership in radar technology. He raised his earnings per share (EPS) estimates for Hensoldt for the years 2023 and 2024, and he now expects the company to report EPS of €1.90 in 2023 and €2.15 in 2024.
Hensoldt shares are currently trading at €31.34, which is below Deutsche Bank's price target of €37. Briest's reiterated "buy" rating suggests that he believes there is still upside potential in Hensoldt's shares.
