Berenberg sees margin boost for Deutz on shift from diesel, starts with 'buy'

Deutz AG

19/11/2025 07:24

** Berenberg initiates Deutz DEZG.DE with "buy" rating, saying that the German engine make's diversification away from diesel engines to new products and end markets should help drive higher margins

** Deutz is seen up 2.7% in early Frankfurt trade

** The company has been moving into new, high-margin applications like electric engines, generator sets and defence applications, with additional growth targeted in its service business, Berenberg says

** The broker expects Deutz's EBIT margin to become structurally higher, towards 10% from historically mid-single-digit, as the company makes the shift via a combination of organic growth and acquisitions related to adjacent products

** Berenberg says it believes a trough has been reached in construction and agriculture, where Deutz has meaningful exposure, with relevant indicators showing signs of stabilization

** Of six analysts who cover Deutz, three rate the company "strong buy" and three rate it "buy", according to LSEG data

(Reporting by Bernadette Hogg)

((bernadette.hogg@thomsonreuters.com))