TKMS: Record Backlog, Delivered Submarines, and a Share Price That Refuses to Cooperate
Published on 09/04/2026 at 05:51 | Editorial boerse-global.de
The INS DRAKON left Kiel on September 1, bound for Israel and closing out a chapter in naval history. The Dolphin-AIP program had reached its end, and thyssenkrupp Marine Systems had delivered. Days earlier, the company had signed a memorandum of understanding with Italy's Fincantieri aimed at deepening collaboration in the underwater domain. Strategic milestones, both — yet the market response has been a shrug.
TKMS shares closed Thursday at €83.70, down roughly 23 percent from their mid-August peak and off 5.2 percent over the past 30 days. The stock sits well below the 52-week high of €108.80 reached on August 14. For a company that has raised its annual guidance twice in a matter of months, the disconnect between operational momentum and share price performance is becoming harder to explain away.
The Numbers Tell One Story
The nine-month figures released on August 12 leave little room for interpretation. Revenue climbed 19 percent to €1.9 billion, while adjusted EBIT rose 13 percent to €110 million. Management responded by lifting its full-year outlook from 2 to 5 percent revenue growth to a new range of 10 to 12 percent, with the adjusted EBIT margin now expected to reach as high as 6.5 percent. The medium-term targets are more ambitious still: 10 percent annual revenue growth at margins above 7 percent.
The submarine segment deserves particular attention. Adjusted EBIT there quadrupled to €46 million as higher-margin newbuild projects progressively replace older, less profitable contracts. The electronics subsidiary Atlas Elektronik delivered equally encouraging numbers, with revenue up 28 percent to €612 million and order intake jumping eightfold to €1.95 billion.
An Order Book That Keeps Growing
The backlog stood at a record €20.1 billion at the end of June. Add the MEKO A-200 DEU frigate contract for four vessels worth €6.3 billion, signed after the balance sheet date, and the order book already exceeds €25 billion. Against a market capitalization of €5.76 billion, that is a substantial multiple — and the pipeline extends further still.
Should investors sell immediately? Or is it worth buying TKMS?
TKMS is considered the preferred bidder for Canada's submarine program, which could involve up to twelve Type 212CD boats valued at over €15 billion for the vessels alone. Final negotiations are underway with India for six submarines, with an option for three more. Both Canada and India are reportedly planning fleets of up to 18 submarines each, and TKMS features on the shortlist in both competitions.
Why the Market Isn't Cheering
The principal drag is visible in the cash flow statement. Free cash flow swung to minus €204 million after nine months, against plus €631 million in the prior-year period. For a defense contractor with long lead times and heavy upfront investment in major projects, such swings are not unusual — but they unsettle investors who focus on cash conversion rather than order intake alone.
There is also the matter of the ransomware attack. TKMS and its subsidiary Atlas Elektronik fell victim to a cyberattack by the group TheGentlemen in June, with data listings identified on a dark web portal. The reputational and operational costs of such incidents are difficult to quantify but belong in any risk assessment.
Bernstein Research raised its price target to €125 with an "Outperform" rating roughly three weeks ago. Since then, the stock has fallen 19.4 percent — a reminder of how little short-term relevance such target adjustments carry.
A Technical Picture in Neutral
The share price now hovers near its 200-day moving average of €83.58, placing it in a technically neutral zone. The RSI at 40.2 suggests selling pressure is easing. The Fincantieri memorandum, meanwhile, remains an expression of intent without quantified order volumes — the collaboration framework agreement expected by year-end will determine whether the market treats it as substance or symbolism.
Operationally, the case for TKMS is difficult to argue against: record backlog, a second guidance raise within months, and a pipeline spanning Canada and India that could sustain growth for years. The cash flow reversal and the cyberattack are genuine concerns, but they hardly justify a sell-off of this magnitude. At some point, the gap between operational strength and share price weakness tends to close — the question is simply which side moves first.
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