Renk Aktie: Will Quarterly Figures Bring the Turnaround?
Strong growth in the order backlog
Quarterly figures below expectations
The Renk Group increased its order backlog in the first quarter of 2023 by a whopping 28 percent to 793 million euros. This is mainly due to the strong order intake in the wind segment. However, the quarterly figures were below expectations. Sales fell by 6.5 percent to 169 million euros. At 10.7 million euros, earnings before interest and taxes (EBIT) were also significantly lower than in the previous year (13.9 million euros). The Renk share price has lost around a quarter of its value since the beginning of the year and is currently fluctuating around 24 euros.Analysts had expected higher sales and earnings for the first quarter. The main reasons for the decline in sales were the lower demand for marine applications and the ongoing supply chain disruptions. The war in Ukraine is also having a negative impact on the business. Renk supplies drive systems, among other things, for armored vehicles. Due to the war, there is currently no demand for such systems.
Despite the weak quarterly figures, the Renk Group is sticking to its forecast for the current year. Sales are expected to increase by 5 to 10 percent to over 800 million euros. The EBIT margin should be between 7 and 9 percent. The Renk share is currently trading at a price-to-earnings ratio (PER) of around 15. This is a fair valuation, but there is currently no great potential for price increases.
Conclusion
The Renk Group is a leading supplier of drive systems for various industries. The company has a strong order backlog, but the quarterly figures were below expectations. The Renk share price has fallen significantly in recent months. Despite the weak quarterly figures, the Renk Group is sticking to its forecast for the current year. The Renk share is currently trading at a fair valuation, but there is currently no great potential for price increases.
