DB says further re-rating not likely for European defence in 2026

Exosens SA

13/01/2026 10:09

** Deutsche Bank says a further re-rating for the European defence sector is unlikely in 2026 after its strong 2025 performance, citing regional spending disparities

** The bank downgrades French defence group Thales TCFP.PA to "hold" from "buy" pointing to lack of catalysts and budget concerns - it notes that with 20% of its sales exposed, the group is vulnerable to a potential French budget cap

** "While we acknowledge Thales' superior technology offering, we are opting for a more conservative approach, at least for now," says the broker

** It also cuts Italian aerospace firm Leonardo LDOF.MI to "hold" from "buy," citing limited upside, adding that "execution is what matters now"

** DB cuts BAE systems BAES.L to "hold" from "buy" noting the group is unlikely to beat FY25 results expectations off disappointing Maritime margins

 (Reporting by Dimitri Rhodes in Gdansk)

 ((dimitri.rhodes@thomsonreuters.com))