Jefferies has reclassified Kion Group AG from underperform to hold, concurrently upping its price objective to €56 from €51. The change follows a year-to-date share price drop of roughly 24% that, according to the brokerage, has produced what it believes is a more defensible valuation for the German forklift and warehouse automation specialist.
At the time of Jefferies' note, Kion's shares were quoted at €52.10, which implies about 7% upside to the new price target. The company is listed in Frankfurt and carries a market capitalisation of around €6.8 billion.
Jefferies said two elements underpin its view that near-term downside is now limited. First, the market selloff has already driven the stock to lower valuation multiples. Second, company guidance for 2026 is deliberately conservative and appears to embed expectations of a challenging operating environment.
On a multiples basis, Jefferies noted the shares trade at roughly 11x price-to-earnings on 2027 estimates, a touch below Kion's long-term historical average of 12x. To derive the new €56 price target, the broker applied that 12x multiple to 2027 earnings - an increase from the 10x multiple used previously.
Division-level outlooks diverge. Jefferies identified the industrial trucks segment as the principal vulnerability. Company management has guided that Germany's fiscal stimulus measures will not provide an uplift to forklift demand, signalling an absence of any immediate recovery in the domestic industrial cycle.
For the industrial trucks division, Jefferies pencilled in adjusted EBIT margins of 9.8% for 2026, rising to 10.2% in both 2027 and 2028. The broker also expects roughly €90 million of restructuring-related savings to materialise during the current year.
Despite the margin recovery projected by Jefferies, the analysts cautioned that downside risks could persist into 2027 if industrial demand remains weak, if pricing competition intensifies, or if the current savings programme is exhausted without identifying further cost measures.
By contrast, Kion's warehouse automation business presented a more favourable profile in Jefferies' assessment. Management reported a robust project pipeline spanning multiple end markets beyond e-commerce, and peers signalled continued expansion in the U.S. market.
Management reiterated a target of exceeding a 10% adjusted EBIT margin for the warehouse automation division by 2027. Jefferies expects that margin to reach 7.3% in 2026, with the step-up to the 10% plus target driven by a higher-quality, better-priced backlog and improvements in project execution.
On group-level forecasts, Jefferies trimmed its adjusted EBIT estimate for 2026 by 3% to €956 million. That figure sits about 4% below Visible Alpha consensus for 2026 and the gap widens to roughly 7% to 10% below consensus for 2027 and 2028.
The brokerage is forecasting group revenues of €11.821 billion in 2026, increasing to €12.781 billion by 2028. Adjusted earnings per share are projected at €3.92 for 2026, €4.68 for 2027 and €5.16 for 2028. Jefferies noted its EPS projections are in double-digit percentage terms below consensus for 2026, which it attributes to a higher assumed tax rate and greater net financial expenses in its model.
Balance-sheet dynamics are expected to improve under Jefferies' scenario. Net financial debt to EBITDA is modelled to fall from 0.3x in 2025 to near zero in 2026, before shifting the company to a net cash position in 2027. Free cash flow is forecast at €715 million in 2026.
Jefferies highlighted a short list of catalysts to watch: data on European and specifically German industrial activity, and order momentum in warehouse automation. These indicators will be central to assessing whether industrial demand rebounds and whether automation orders can offset weakness in traditional forklift markets.
Additional research tools were referenced in the original note, including an AI-driven stock selection product that evaluates KGX and other companies against hundreds of financial metrics. That product was described as identifying names with favourable risk-reward profiles, though specific inclusion of Kion in any strategies was not stated in the brokerage's published note.