We expect Q3 to confirm that Elmos’s operating momentum remains intact, with sales of around EUR 168m, a book-to-bill above one, gross margin of roughly 44.5% and operating EBIT margin around 25%, alongside continued strong cash conversion. The main new watchpoint is more aggressive pricing in interior lighting, where Melexis is seeking to regain share; however, with the segment representing only around 8-9% of Elmos sales and carrying below-average profitability, we see the group-level earnings risk as manageable even if some share is lost. With broader growth opportunities across ranging, motor control, sensing and SDV-related applications, and the shares trading at only around 18.4x 2027E P/E, we continue to see attractive risk/reward and reiterate our BUY rating and EUR 180.00 price target ahead of Q3. The full update can be downloaded under https://research-hub.de/companies/elmos-semiconductor-se

On 05 November, Hensoldt will report Q3 results. We expect the company to report a solid Q3 with sales of EUR 695m (+17% yoy), and Adj. EBITDA of EUR 125m, (18% margin). Cash flow should remain seasonally weak at ~EUR 35m, which we would not overweight given Hensoldt’s pronounced Q4 skew. Our estimates make an FY26 guidance raise increasingly likely as only 4% Q4 sales growth would be required vs. an average Q4 growth of 14% over the past three years. However, we believe such a raise is largely priced in. The bigger question is whether management also upgrades its long-term ambitions. Without this, our concerns around a revenue peak in the early 2030s and Hensoldt’s substantial exposure to armoured platforms remain. Monday´s Ukraine driven share price gain has already more than reversed. At the current valuation, we still see insufficient compensation for these structural risks. SELL, PT EUR 62.00. Gain more and deeper insight into the Defense and Security sector. Join our online conference today: research-hub.de/conference/defense-and-security The full update can be downloaded under https://research-hub.de/companies/hensoldt-ag

Lufthansa´s Q3 should confirm that demand remains strong, with higher RASK (Revenue per Available Seat Kilometre) offsetting lower capacity and supporting solid profitability and cash flow. Jet fuel is a near term headwind, but we see it as transitory given a meaningful FY27 hedging and an easing crack spread outlook. The main downside would be a sustained oil price above USD 160/bbl. Until then, valuation remains compelling, with fleet and MRO assets covering most of EV. BUY, PT EUR 21.00. The full update can be downloaded under https://research-hub.de/companies/deutsche-lufthansa-ag

AUTO1’s Q3 pre-close update showed softer unit growth and lower EBITDA than Visible Alpha consensus, triggering renewed share-price pressure. Merchant growth is running at around 10% yoy, while Retail growth appears closer to 18%, both below H1 momentum. However, the comparison base was demanding and unit economics continue to improve, supported by faster trading speeds and higher Gross Profits Per Unit (GPU) following the rollout of the new trading system. Management expects growth to re-accelerate in Q4 and reiterated FY26 guidance. We leave our estimates unchanged and maintain our EUR 35.00 price target and BUY rating. The full update can be downloaded under https://research-hub.de/companies/auto1-group-se

Germany is moving closer to ordering four additional MEKO A 200 DEU frigates from TKMS, worth EUR 5.3bn, taking the F128 programme to eight ships and EUR 11.6bn. The collapse of Rheinmetall’s F126 programme strengthens TKMS’s position, as schedule reliability has become critical and TKMS targets first delivery in 2029. Damen Naval is challenging the direct award on procurement law grounds and has launched a EUR 4.7bn legal claim against the German government, not TKMS, limiting direct economic risk. The second batch extends delivery visibility to 2035 and supports structural growth in Surface Vessels. With a strong backlog and potential submarine wins in India and Canada, we reiterate BUY and our unchanged EUR 140 PT. Gain more insights on the sector at our virtual Defense and Security Conference, on 8 October. Registration under: https://research-hub.de/conference/defense-and-security. The full update can be downloaded under https://research-hub.de/companies/tkms-ag-co-kgaa

Rheinmetall’s board is highly aligned with the share price due to their Share Ownership Guidelines (SOG). CEO Armin Papperger has invested around EUR 13.8m in shares since 2023, more than four times his SOG requirement, which we view as a strong vote of confidence. By contrast, the three newer board members have shown limited discretionary buying so far, although Long-Term Incentive programme shares also count towards their SOG obligations and therefore soften the read through. Given the recent share price weakness, additional open market purchases could have been a positive signal though they did not buy but we expect purchases in the upcoming months. Separately, limited visibility following the Q3 pre-close leads us to cut our Q3 estimates from EUR 3.9bn sales and EUR 740m EBIT to EUR 3.4bn and EUR 650m, respectively. HOLD, PT EUR 1,050 confirmed. Gain more insights on the sector at our virtual Defense and Security Conference, on 8 October. Registration under: https://research-hub.de/conference/defense-and-security. The full update can be downloaded under https://research-hub.de/companies/rheinmetall-ag

We expect NORMA to deliver a softer Q3, mainly reflecting seasonal weakness and continued pressure from the automotive downturn. While Industry Applications (IA) provides an important counterweight, its smaller scale means it cannot fully offset weakness in Mobility & New Energy. Against this backdrop, NewNORMA remains the key lever to simplify the organisation, lower the cost base and improve efficiency. We see 2026 as a transition year, with execution more important than near-term earnings. A recovery in automotive should then offer stronger operating leverage on a leaner cost base, while the growing IA business adds further growth and diversification. We lower our est. again after the Q3 pre-close call but maintain our BUY rating and EUR 23.00 PT. NORMA CFO Okan Celiker will join our German Select conference on December 1, register here: https://research-hub.de/events The full update can be downloaded under https://research-hub.de/companies/norma-group-se

United Internet (UI) will participate in a 20% capital increase at 1&1 by contributing an EUR 850m loan receivable against 1&1 Versatel as a non-cash contribution. In return, UI receives 35.35m new 1&1 shares at an implied issue price of EUR 24.05 per share. Following completion, its stake in 1&1 will rise to around 89.32%, including 1.29m shares already acquired under its ongoing share purchase mandate. We view the transaction positively. Besides materially strengthening 1&1’s standalone capital structure without an additional cash outflow for UI, the deal brings UI very close to the strategically important 90% ownership threshold. While management has not indicated plans for a squeeze-out, crossing 90% would broaden its strategic options regarding the future ownership structure of 1&1. We leave our estimates unchanged and reiterate BUY with a PT of EUR 30.00. The full update can be downloaded under https://research-hub.de/companies/united-internet-ag

Merz’s Kyiv visit produced EUR 6.6bn of defense agreements, but the Hensoldt angle looks far less exciting than the main headline suggests. Hensoldt signed a Memorandum of understanding (MoU) for further large-scale radar deliveries, with no disclosed value, volume or timing. Despite several media reports referring to a satellite contract, the company itself explicitly points to additional radar systems, most likely extending the existing TRML 4D franchise rather than adding a new growth leg. Ukraine is one of Hensoldt’s largest TRML 4D customer, with ~50 systems in service by our estimate. Yet even a repeat of the EUR 340m July 2025 radar order would represent only 11% of 2026E sales, while the stock added roughly EUR 500m in market value on the news. The MoU therefore confirms strong radar demand, but does not address our concerns around mix, the software gap or a potential revenue peak in the early 2030s. SELL, PT. EUR 62.00. Gain more and deeper insight into the Defense and Security sector. Join our online conference on 8 October: research-hub.de/conference/defense-and-security The full update can be downloaded under https://research-hub.de/companies/hensoldt-ag

We expect Rational to deliver a solid Q3, with sales of c.EUR 333m (+6.5% yoy) and a 25.0% EBIT margin, supported by healthy European demand, limited pre-buying ahead of the October price increase, easing FX pressure and first benefits from lower US tariff rates, partly offset by regional volatility in US schools, China and Japan. Product trends should remain constructive, with iVario growing in the low- to mid-teens and iCombi returning toward mid-single-digit growth. Overall, we see Q3 as validating the FY26 earnings framework rather than changing the thesis. With the recent de-rating appearing driven more by macro factors, sector rotation and short-term regional noise than by a material deterioration in Rational’s earnings outlook, the contraction in 2027E P/E from c.31x to c.21.4x creates, in our view, an attractive entry point. We reiterate our BUY rating and EUR 830.00 price target. The full update can be downloaded under https://research-hub.de/companies/rational-ag