Knorr-Bremse Shares Drop 8% Despite Raised Guidance

Knorr-Bremse Shares Drop 8% Despite Raised Guidance

Shares in Knorr‑Bremse tumbled roughly 8% in early trading on Thursday, even though the braking‑systems maker reported stronger first‑half results and lifted its 2026 guidance. Order intake for the first half rose to €2.2 billion, leaving the company with a record order book of €7.9 billion. Revenue climbed organically 6.4% year‑on‑year to €2.1 billion.

Operating EBIT increased 13.7% to €566 million, up from €498 million a year earlier, and the operating EBIT margin expanded by 130 basis points to 13.9% from 12.6%. Earnings per share rose more than 24% to €1.08, while free cash flow jumped almost 80% to €262 million.

The 2026 guidance was raised, now expecting revenue of €8.1 billion to €8.3 billion (previously €8.0 billion to €8.3 billion) and an operating EBIT margin target of 14.0%‑14.5% (up from around 14%). Free cash flow is now projected at €750 million to €850 million, up from the earlier forecast. The guidance assumes the Middle‑East crisis does not escalate or cause supply‑chain disruptions and reflects the recent acquisition of duagon.

Looking to 2030, Knorr‑Bremse set new targets of roughly €10 billion revenue, an operating EBIT margin of about 16%, a cash‑conversion rate above 90%, and a return on capital employed above 25%.

JPMorgan analysts described the second‑quarter results as solid but called the medium‑term guidance “conservative,” noting that consensus pricing already implies a 15.7% EBIT margin for 2028.