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

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Original-Research: Deutz AG - from Quirin Privatbank Kapitalmarktgeschäft

30.03.2026 / 15:52 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: 30.03.2026

Target price: 12.00

Last rating change:

Analyst: Klaus Soer

Strategic diversification into growth segments drives profits and margins

DEZ presented a great set of results on the remarkable operational

performance in FY25. Despite a challenging macroeconomic environment, DEZ

was able to perform a strong and high FY25 adj. EBIT result (EUR 112m, +46%,

adj. margin of 5.5% vs. 4.2% FY24). This includes an underlying margin

expansion of the core classic engine segment to 7%. The most recent

acquisitions of Sobek (defense, drone components), Blue star power systems

(gensets, energy infrastructure) and several acquisitions in the highly

profitable service business are paying off. The newly acquired operations

are contributing largely to the growth in sales, profits and especially

margins. The strategic shift towards value enhancing new business fields

like defense and energy infrastructure will reduce the dependence on the

cyclical and economic sensitive classical engine business and provides a

great platform for further growth. DEZ had obviously already a great start

into the new FY 26e. Based on trading statements and the current strong

order backlog we anticipate growth in H1/26 in all business units. The sales

and earnings momentum in FY26 will be supported by the most recent

acquisition Frerk in the energy segment. While all business segments will

show growth momentum, the strongest increase might be seen in the service

and the energy segment. Even the cyclical and economic sensitive classical

engine segment might recover from recent lows supported by higher demand in

important distribution industries like agriculture and construction

machinery. In total we expect DEZ FY26e group sales to grow by 19.4% to EUR

2,440m. Due to the growing proportion of margin enhancing operations FY26e

adj. EBIT should grow by 50.3% to EUR 169m (adj. EBIT margin 6.9%). Given

the strong balance sheet structure with an equity ratio of more than 50% and

a low financial leverage we expect the current management to continue its

opportunistic M&A strategy in FY 26. Focus might be a strengthening of the

defense and/or the energy operations. Also further investments into the

global service network of DEZ are likely. We have adjusted our model on DEZ

to the new growth perspectives and including the most recent acquisitions.

DEZ stock currently trades with a significant discount to both its

international peers and vs. our DCF model which includes the long-term

perspective to a better extent. We stick to our Buy Rec. and increase the TP

to EUR 12,00 (prev. EUR 10.00).

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=236101fb9184fd2c1efc8a7297ed4bee

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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2300512 30.03.2026 CET/CEST

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