Citi ups Hensoldt, Renk: No longer 'fundamentally overvalued'

RENK AG

22/08/2025 08:12

** Citigroup upgrades German defence firms Hensoldt HAGG.DE and Renk R3NK.DE to "neutral" from "sell," as recent share price declines mean the stocks are no longer "fundamentally overvalued"

** Citi says it sees Germany increasing its defense spending to 3.5% of its Gross Domestic Product (GDP), irrespective of the outcome of the Ukraine conflict

** The broker notes Hensoldt is well-positioned with about 58% of its sales in Germany

** Renk, a gearbox manufacturer, is seen benefiting from the re-equipping of European land forces, its core business, the broker says

** "The shares are likely to be volatile and newsflow-driven, but we no longer see them as fundamentally overvalued," the brokerage adds

** Shares in Hensoldt and Renk are up by around 150% and 220% YTD, respectively

 (Reporting by Maria Rugamer)

 ((Maria.Rugamer@thomsonreuters.com))