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Original-Research: Deutz AG - from Quirin Privatbank Kapitalmarktgeschäft

05.05.2025 / 14:13 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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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
research@quirinprivatbank.de
https://research.quirinprivatbank.de/

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2130184 05.05.2025 CET/CEST

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