Deutz Holds Two Buy Ratings as Brokers Split on How to Price the FFG Bet
Published on 11/06/2026 at 22:11 | Editorial boerse-global.de
Two German brokers reaffirmed their buy calls on Deutz on the same day, yet they arrived at the engine maker's shares from opposite directions — one leaning on the strategic weight of the completed FFG takeover, the other on an order book that came in ahead of expectations. The divergence says as much about the valuation debate around Deutz as it does about the company itself.
Berenberg kept its price target at EUR 16.50 and its buy rating intact, with analyst Lasse Stueben calling the quarterly figures mixed. What carried the recommendation was the early closing of the acquisition of defence contractor FFG, which he framed as a significant step in the engine builder's transformation. MPCM, meanwhile, trimmed its target to EUR 18 from EUR 19 while holding its "Buy" rating. Analyst Stefan Augustin pointed to third-quarter orders that beat expectations, though he also folded peer-group valuation into the lower target.
Both houses stay on the buyer's side. Where they part company is emphasis: MPCM highlights the surprisingly strong order intake and the comparable-company benchmark; Berenberg sets the strategic importance of the FFG deal alongside a muddier operating picture.
A profit decline that complicates the story
The caution embedded in the ratings traces back to earnings. According to RTTNews, Deutz earned EUR 6.9 million in the third quarter of 2026, down from EUR 12.3 million a year earlier. Revenue, by contrast, climbed 12.3% to EUR 553.9 million in the same quarter. For the full year, the company is guiding to revenue of EUR 2.3–2.5 billion.
Should investors sell immediately? Or is it worth buying Deutz?
That gap between a growing top line and a shrinking bottom line is the crux of the investment case. The brokers are betting on brighter prospects while the most recent profit trend remains a soft spot. Stronger orders only help if they eventually translate into better earnings.
Nine-month figures give the optimists ammunition
The case for optimism does not rest on the quarter alone. Deutz reported revenue of roughly EUR 1.67 billion for the first nine months of 2026, growth of about 11%. Adjusted EBIT rose around 36% to EUR 118 million, lifting the adjusted EBIT margin to 7.1%. Order intake reached approximately EUR 1.96 billion over the same period, more than 30% above the prior-year level.
That combination — expanding sales paired with a rising operating result — is what gives the positive ratings a foundation in the existing business rather than in defence hopes alone. Investors who view the stock purely through its defence lens, on this reading, underweight the progress already booked.
The bar for a re-rating
Expectations around FFG add weight to the re-rating discussion, and they raise the bar for future results in equal measure. From the acquisition, completed and announced yesterday, Deutz expects more than EUR 1 billion in additional defence revenue for 2027 at an adjusted EBITDA margin above 20%. That forecast points to considerable earnings potential — provided the company delivers both the scale and the profitability it has promised.
Come valuation time, the clean test is straightforward: judge the EBITDA guidance against actual EBITDA delivery, while keeping adjusted EBIT in view for the overall operating picture. On balance, the operating arguments favour a constructive stance on Deutz as long as growth and earnings power move forward together. The recent figures supply evidence for that. A further re-rating is earned only if the company also meets the high expectations attached to its additional defence business.
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