Hensoldt is set to release first-half results on July 31. Here’s Morningstar’s take on what to look for in Hensoldt’s earnings and the outlook for its stock.
HENSOLDT HAG
Analyst: Loredana Muharremi, CFA
- Fair Value Estimate: EUR 100.00
- Morningstar Rating: ★★★★
- Economic Moat: Wide
- Morningstar Uncertainty Rating: Medium
Hensoldt Earnings Release Date
- Friday, July 31
Hensoldt enters the first-half release after record first-quarter orders and strong growth in revenue and profitability. Optronics drove the improvement as Puma and Schakal orders moved into backlog and higher production volumes supported margins. Sensors continued to grow, although capacity investment, R&D and pass-through revenue limited operating leverage.
Since last quarter, Hensoldt raised its cash-conversion guidance because accelerated German procurement generated higher customer advances. This matters more than the interim cash figure: Advance payments demonstrate that higher budgets are converting into funded programs while helping finance capacity expansion.
Hensoldt also completed the Nedinsco acquisition in June. Its first-half contribution will be limited, but the deal strengthens Optronics’ positions across Boxer, Lynx, CV90, Puma and Leopard.
The cancellation of the F126 combat ship and collapse of fighter program FCAS reduce visibility on two important long-term growth opportunities. Hensoldt may secure content on the MEKO A-200 replacement and any future German-led fighter program, but the value and timing remain uncertain.
What to Expect frm Hensoldt’s Earnings
- We expect revenue growth led by the Optronics production ramp and continued execution on Eurofighter, PEGASUS and radar programs. Nedinsco will make only a modest reported contribution.
- We project adjusted EBITDA to grow faster than revenue and the group margin to expand, driven by volume and scale benefits in Optronics. Sensors margins will remain constrained by R&D, new radar capacity and pass-through revenue.
- We expect first-half orders to grow strongly year over year following the exceptional first quarter. A sequential decline in Q2 would reflect the front-loading of Puma and Schakal orders rather than weaker demand. Conversion of TRML-4D, PEGASUS and electronic-warfare opportunities matters more than the precise quarterly intake.
- We expect cash flow to improve year over year but remain affected by normal first-half seasonality and elevated investment.
- We expect management to reiterate its revenue, margin and order guidance alongside the recently raised cash outlook driven by downpayments on order conversion.
