During mwb research’s roundtable yesterday, Dr. Andreas Aufschnaiter, CEO of MS Industrie, outlined the company’s transformation and strategic focus. In mid-2024, MS Industrie sold 51% of MS Ultraschall to concentrate on its core business, MS XTEC, which primarily supplies mechanical parts for heavy-duty trucks. Dr. Aufschnaiter also discussed the challenges in the truck market, noting that the 17.5% yoy decline in the order backlog in 2024 was driven by market uncertainty, causing truck manufacturers to reduce their inventories. Despite this, he highlighted early signs of recovery, with the order backlog increasing 8.9% yoy in January 2025. The potential for catch-up effects and higher demand is not yet reflected in mwb research’s conservative estimates. mwb research’s analysts maintain their BUY rating with an unchanged PT of EUR 2.40, offering a 64% upside, as the analysts look for further signs of a sustainable recovery in demand. You can find the roundtable recording here: https://research-hub.de/events/video/2025-02-18-13-30/MSAG-GR. The full update can be downloaded under https://research-hub.de/companies/ms-industrie-ag

Elmos delivered a resilient Q4, with sales of EUR 146m (-6.9% qoq) and a strong operating EBIT margin of 24.8% (-0.7pp qoq), showcasing its ability to navigate ongoing inventory overhang and subdued demand. This brought FY24 revenue to EUR 581.1m (+1.1% yoy) and a stable EBIT margin of 25.1% (-1pp yoy), outperforming many peers facing sales declines. Operating cash flow for FY24 came in at EUR 16.3m (2023: EUR 102.6m), significantly impacted by a tax payment of EUR 100m in Q4. The outlook for 2025 remains cautious yet in line, with flat sales guidance of EUR 580m ±30m and an EBIT margin of 23% ± 3pp, though adjusted FCF is set to improve significantly to +7% ±2pp of sales (2024: 0.9%) due to strategic initiatives. With a leading market position in automotive applications, disciplined execution, and record design wins, Elmos remains well-positioned for long-term structural growth. mwb research’s analysts reiterate their BUY rating with a PT of EUR 98.00. The full update can be downloaded under https://research-hub.de/companies/Elmos%20Semiconductor%20SE

Formycon has lowered its expectations for the U.S. market, adjusting its commercialization outlook amid steep pricing pressures and fierce competition. The company announced significant impairments for FYB202 and FYB201, reflecting reduced revenue projections in the highly competitive U.S. biosimilar space. With multiple Stelara biosimilars set to launch, Formycon now anticipates lower peak sales for FYB202, while FYB201 faces potential commercialization delays as Sandoz reconsiders its approach. On the positive side, the termination of the Phase III "Lotus" trial (FYB206) provides substantial cost savings, helping to offset some financial strain. After model revision, mwb research now assign Formycon a PT of EUR 62.00 and resume their BUY rating, implying strong recovery potential following the sharp decline. More updates are expected in March 2025. The full update can be downloaded under https://www.research-hub.de/companies/Formycon%20AG

Formycon has delivered a highly negative update on its commercialization pipeline, causing a sharp market reaction. The company announced potential major financial impairments for FYB202 and FYB201, driven by higher-than-expected price discounts in the U.S. biosimilar market. Additionally, FYB201’s commercialization is now uncertain, as discussions with Sandoz AG continue, and a temporary pause in U.S. sales is under consideration. Meanwhile, FYB202 faces a significant impairment charge due to pricing pressures, further straining revenue expectations. Following a sharp decline in its stock price, the company has scheduled an analyst call for later today. Mwb research put the rating under review and suspended the price target until they have reassessed their financial model in light of these developments. The full update can be downloaded under https://www.research-hub.de/companies/Formycon%20AG

ZEAL’s FY24 report on March 26, 2025, will set the stage for its FY25 outlook, with momentum firmly in place. Despite jackpot-fueled highs in 2024, ZEAL isn’t a one-hit wonder—its structurally expanding customer base, digital lottery shift, and diversified revenue streams position it for growth in 2025 (mwb est. ~+7% yoy), even in a normalized jackpot cycle. A unique scalable and asset-light model drives strong margins (mwb est. ~30% EBITDA) and robust cash flow, propelling shareholder value through dividends, and buybacks. In a high high-barrier-to-entry market ZEAL possess a competitive moat and face no real threats. ZEAL remains a resilient play and a compelling hedge in light of ongoing economic uncertainty in Germany. mwb research reiterate their BUY recommendation with an unchanged price target of EUR 60.00. The full update can be downloaded under https://www.research-hub.de/companies/ZEAL%20Network%20SE

NATO is pushing for higher defense spending, with a new target of at least 3% of GDP according to NATO Secretary-General Mark Rutte —up 50% from current levels. In 2024, EU and Canadian defense investments surged to EUR 462bn, with European NATO members contributing EUR 326bn. Hensoldt has benefited from this trend, securing around 0.7% of European NATO defense spending. However, long-term growth prospects beyond 2030 are uncertain due to reliance on existing platforms and increasing competition. Despite involvement in key programs, Hensoldt lacks transformative growth drivers, with recurring revenues offering only limited support according to the analysts. Given the strong recent stock performance and modest revenue adjustments post-2026, the analysts raise their PT to EUR 45.00 (prev. EUR 43.00) but downgrade Hensoldt to HOLD (from BUY). The full update can be downloaded under https://www.research-hub.de/companies/Hensoldt%20AG.

With NATO raising defense spending targets, Rheinmetall stands to benefit significantly according to mwb research. At the Munich Security Conference, NATO Secretary-General Mark Rutte called for increased defense spending “north of 3%”. European NATO members already increased defense budgets by nearly 20% in 2024, reaching EUR 326bn. Rheinmetall secured ~3% of this spending and is well-positioned for further growth. Rheinmetall’s focus on tanks, ammunition, and drones aligns with NATO's priorities, ensuring long-term demand. Despite short-term volatility, Rheinmetall remains the key player in European defense. Given the improved revenue outlook, the analysts raise their price target to EUR 1,025.00 (prev. EUR 800.00) and reiterate their BUY rating. The full update can be downloaded under https://www.research-hub.de/companies/Rheinmetall%20AG

Negative market conditions and internal challenges continue to worry TAKKT. Q4 2024 sales were organically (org.) down 11.5% yoy, with reported topline at EUR 254.5m. The pace of decline has somewhat eased, helping curtail the full-year org. decline at 15.4% yoy. Gross and adjusted EBITDA margins were down 3.3ppt and 3.7ppt yoy, respectively, due to diseconomies of scale, destocking at lower prices, and realignment costs. The 2025 outlook is tepid, with a return to revenue growth not expected till the latter part of the year and a slight increase in the adj. EBITDA margin. While TAKKT's robust cash generation, consistent shareholder returns, and the realignment/revamping of the underlying business reinforces its medium-to long- term growth potential, without a strong near-term catalyst, mwb research’s analysts believe it is too early to reenter the stock. Hence, the analysts maintain their HOLD rating with a PT of EUR 8.50. The full update can be downloaded under https://www.research-hub.de/companies/research/TAKKT%20AG

United Internet's prelim. FY24 results show stable sales development, with c. 2% yoy increase to EUR 6.33bn, meeting its revenue guidance and mwb research’s expectations. The company added 590K new paid subscriptions across segments, demonstrating strong customer growth. However, unexpected issues with the 1&1 mobile network roll-out, including a temporary outage and undersized components, impacted profitability. Hence, EBITDA fell short of its guidance and arrived at EUR 1.29bn (mbw est. EUR 1.39bn), with Q4 EBITDA margins declining 250bps yoy. Additional depreciation on network investments further weighed on UI’s profitability with EBIT down c. 15% yoy to EBIT 639m. Despite these setbacks, the core business remains sound, with resilient customer demand. mwb research’s analysts reiterate to BUY albeit with lower PT of EUR 23.00 (previously: EUR 25.00), having adjusted their estimates to account for recent challenges, higher financing costs and the expected timeline for resolving network issues. The full update can be downloaded https://www.research-hub.de/companies/United%20Internet%20AG

The European truck market recession in the second half of 2024 posed near-term challenges for suppliers such as MS Industrie, as weak economic growth, high interest rates, and geopolitical uncertainty reduced demand. MS Industrie faced headwinds, particularly in Europe, which accounts for 61% of its sales, but there are signs of a revival in demand. However, long-term contracts with major clients such as Daimler and Traton offer stability. The company's focus on its core business, MS XTEC, ensures high-quality products and long-term growth prospects. Streamlining operations and strong automation investments position the company for low future CAPEX, robust free cash flow, and a solid financial outlook. Political and economic factors, including a potential recovery in Germany, could support a market rebound, creating growth opportunities for MS Industrie in the long term. mwb research’s analysts reiterate their BUY rating with an unchanged PT of EUR 2.40. Join mwb research’s online roundtable with CEO Dr. Andreas Aufschnaiter on Tuesday, February 18. Click here to register: https://research-hub.de/events/registration/2025-02-18-13-30/MSAG-GR. The full update can be downloaded under https://research-hub.de/companies/ms-industrie-ag