Original-Research: Deutz AG (von Quirin Privatbank Kapitalmarktgeschäft): Buy

Original-Research: Deutz AG - from Quirin Privatbank Kapitalmarktgeschäft

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05.05.2025 / 14:13 CET/CEST

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Classification of Quirin Privatbank Kapitalmarktgeschäft to Deutz AG

Company Name: Deutz AG

ISIN: DE0006305006

Reason for the research: Update

Recommendation: Buy

from: 05.05.2025

Target price: 9,00

Last rating change:

Analyst: Klaus Soer

Climing up the growth path despite geopolitic uncertainties

Deutz had a good start into the new FY25 indicated by the strong order

intake of Q1/25 of EUR 546.1m (+30.3% yoy). We expect DEZ to gain growth

momentum in FY25e. Revenues in FY25 will be supported by the consolidation

and integration of the recent acquisitions like blue star power systems in

the US and the distribution activities of RRPS. We expect service revenues

continue to rise in FY 25. Those effects might compensate the ongoing

weakness in the core engine business mainly related to the cyclical pattern

in main distribution industries like construction and agriculture machinery.

We expect FY 25 revenues to rise by about 25% yoy to EUR 2,275m. Adj. EBIT

should reach EUR 117.5m. The adj. EBIT margin of 5.2% is diluted by the

cyclical weak engine business but get a steady and strong support by the

rising proportion of service sales. Despite a 29% US revenue proportion DEZ

might not be largely impacted by potential tariffs. DEZ delivers engines and

spare parts mainly into specific applications and long-term projects.

Another important growth factor going forward might be a higher revenue

share into the military and security industry. The current revenue

proportion of just below 2% (equipped with higher margins) might quickly

start to double. DEZ share had a good run since early 2025 and has closed

the valuation gap to a certain extend. Nevertheless, the current valuation

is still characterized by low multiples (FY26e: EV/EBITDA 4.7x) and sharp

discounts to the international peers. The multiple peer valuation is largely

supported by our DCF value. We raise our TP to EUR 9.00 (previous EUR 8.00)

and stick to the BUY Rating.

You can download the research here: http://www.more-ir.de/d/32444.pdf

For additional information visit our website:

https://research.quirinprivatbank.de/

Contact for questions:

Quirin Privatbank AG

Institutionelles Research

Schillerstraße 20

60313 Frankfurt am Main

[email protected]

https://research.quirinprivatbank.de/

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2130184 05.05.2025 CET/CEST

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Quelle: dpa-AFX