Hensoldt Raising PT to EUR 100 to reflect portfolio attractions and increasing industry M&A

Research evidence excerpt

J P M O R G A N

Europe Equity Research

05 August 2026

Hensoldt

Raising PT to EUR 100 to reflect portfolio attractions

and increasing industry M&A

Neutral

HAGG.DE, HAG GR

Price (05 Aug 26):€86.7

▲Price Target (Dec-27):€100.0

Prior (Dec-27):€85.0

On July 31st HAG reported Q2 26 results that were slightly ahead of consensus

(Table 1). We increase our 2026-30E EPS by 1-2% pa (Table 2); however, we

increased our multiples-based Dec-27 PT by 18% to €100 for two reasons. First,

our discussions with investors suggest they are willing to pay higher multiples for

companies whose products/services are best suited to the “future of war” and/or

have a wide moat. Our analysis suggests HAG is one such company. Second, we

are seeing an increase in M&A activity in the European and US defence sector, and

we think that the valuations of strategically attractive SMID cap companies (like

HAG) are now incorporating the potential for a bid. Our new PT suggests potential

upside of 14% over the next 17 months. We maintain a Neutral rating but would

see any share price weakness as an opportunity to be more constructive.

H1 26 results show that operational improvements are starting to yield

results: HAG’s growth lagged peers (RENK and RHM) in 2023-25, in part

because its portfolio is more “late cycle”, but also because it needed to invest

more heavily to capture future growth opportunities. It has invested in several

new production/logistical facilities and a new SAP system. As evidenced by

the very strong H1 26 sales growth (especially in Optronics), these initiatives

now appear to be yielding results.

FY26 guidance now looks conservative: HAG’s implied growth to meet its

FY26 revenue guidance of €2.75bn implies 5% growth in H2, a material

slowdown from the 18% core revenue growth reported in H1. We think it is

likely HAG will nudge up its FY guidance with its Q3 results or at its CMD later

this year.

HAG has a very well positioned portfolio: An ongoing debate among

investors is whether defence companies that have portfolios with greater

exposure to ‘next-generation’ platforms (eg. air defence systems, unmanned /

…