FRANKFURT (dpa-AFX) – The business outlook from Renk failed to shake the defense supplier's shares out of their recent lethargy on Thursday. Critical voices emerged regarding the outlook and cash flow after the company reported record sales and new business for the past year. Amid certain fluctuations, the shares managed to halve their losses from as much as four percent down to around two percent.
The outlook was somewhat weaker than expected at the midpoint of the company's very broad target ranges for both revenue and operating profit, wrote Jefferies analyst Chloe Lemarie. George McWhirter of Berenberg Bank, meanwhile, noted that free cash flow was weighed down by delayed orders. According to JPMorgan specialist David Perry, operating profit in the fourth quarter also failed to meet expectations, but the market had already been prepared for this in a pre-briefing.
With these losses, Renk shares on Thursday remained within their recent trading range of around 55 to 62 euros. They also stood out negatively within the sector environment, as at least Rheinmetall shares performed better, holding steady at the previous day's level. The overall market continued to stabilize after suffering earlier in the week from fears of oil and gas shortages due to the Iran conflict.
According to JPMorgan expert Perry, the geopolitical environment suggests a continued strong performance for defense stocks. He sees Renk as exceptionally well positioned due to its presence in both the German and US defense markets, and therefore mentioned his belief that any weakness in the share price presents a buying opportunity./tih/nas/mis
