Jefferies moved ThyssenKrupp AG to a buy rating from hold and raised its price target to €13 from €12.50 in a note published Friday, a change that helped push the stock up by more than 4%.
The brokerage increased its adjusted EBIT forecast for 2026 by 5% to €846 million, noting this sits roughly 6% above consensus estimates of €795 million. It also lifted its 2027 adjusted EBIT projection, putting that figure at €1.2 billion and representing a 10% increase versus consensus.
Jefferies now expects 2026 EBITDA of €1.51 billion, a modest rise from its previous €1.49 billion estimate, while consensus sits at €1.54 billion. At the time of the note, shares were trading at €10.80, against a 52-week range of €12.48 to €4.33 and implying a market capitalization near €6.7 billion. The new €13 target equates to roughly 20% upside from the prior close, according to the report.
Revenue and recent company results
Jefferies left its 2026 revenue forecast broadly unchanged year on year at €32.83 billion, slightly below consensus of €33.12 billion. The broker projects revenue to increase to €34.05 billion in 2027, compared with consensus of €34.43 billion. For the financial year ended September 2025, ThyssenKrupp reported revenue of €32.84 billion and EBITDA of €1.52 billion.
Cash flow, restructuring and dividend guidance
The company is guiding for fiscal 2026 free cash flow in a range between -€600 million and -€400 million. That guidance factors in €350 million of restructuring outflows, capital expenditures of €1.4 billion to €1.6 billion, and the absence of any sizeable government pre-payments after receiving €1 billion from Germany in 2025. Jefferies’ own estimate places 2026 free cash flow at -€445 million.
After reporting roughly -€1.5 billion in free cash flow in the first quarter, the company is guiding for a turnaround beginning in the second half of the fiscal year, which Jefferies estimates should result in approximately €4.7 billion of net cash. The company has proposed a dividend of €0.15 per share, which implies a yield of about 1.4% for 2026.
Steel Europe: results, costs and exposure
Within the Steel Europe division, Jefferies raised its 2026 adjusted EBIT estimate by 5% to €380 million, which compares with company guidance of €275 million to €375 million. In the first quarter, ThyssenKrupp recorded €400 million in restructuring costs tied to Steel Europe, and it expects mid-to-high three-digit million euro restructuring costs in fiscal 2026.
The division’s adjusted EBIT rose about 30% year on year in the quarter, a performance Jefferies attributed to lower raw material costs, efficiency improvements and more than €125 million in electrical price compensation recorded in fiscal 2024/25. The brokerage noted those compensation amounts are not expected to recur in the second quarter.
Jefferies also highlighted the concentration of certain balance sheet items in Steel Europe, saying roughly 50% of the group’s €5.3 billion in pension provisions and the company’s €1.4 billion to €1.6 billion capital expenditure programme are linked to the steel division.
tk Elevator stake and valuation approach
The report drew attention to ThyssenKrupp’s 16.5% holding in tk Elevator, which Jefferies values at €2.1 billion on a breakdown that includes a €1 billion interest-free loan, €1 billion in ordinary shares and €100 million in preferred shares. Jefferies recorded tk Elevator’s most recently reported EBITDA at €1.6 billion and estimated the 16.5% stake could be worth in the region of €3 billion to €3.5 billion when applying peer multiples of 16x to 17x EV/EBITDA and assuming net debt of about €6.5 billion.
Overall, Jefferies applied a sum-of-the-parts valuation to ThyssenKrupp and then imposed a 20% discount to the aggregated value to reflect the company’s conglomerate structure and execution risk. That method delivered an intrinsic value of €13 per share.
Market reaction and context
The combination of upgraded earnings forecasts, explicit restructuring milestones and the stated value of the tk Elevator stake underpinned Jefferies’ decision to move to a buy rating. The broker’s revised assumptions around Steel Europe profitability and the company’s guidance on cash flow and capital allocation were central to the revised target.
Investors should note the firm’s expectations for a swing from negative cash flow in the first half to a net cash position by the end of the period, as well as the announced near-term restructuring costs and the concentration of pension and capex exposure in the steel business.