Steyr Motors AG Maintains Positive Outlook Despite Delayed Growth

NuWays AG maintains a "BUY" recommendation for Steyr Motors AG, setting a target price of EUR 49 despite recent challenges. Steyr Motors faced a weaker Q2, with sales falling 4.5% year-over-year, largely due to delayed orders from major clients like KNDS. The company adjusted its full-year 2026 guidance downward, attributing the shortfall to timing rather than a loss of orders.

Civil sales rose by 39% year-over-year in H1, while defense contracts dropped by 30% due to delays. The outlook for H2 suggests a potential 41% growth year-over-year, with an expected adjusted EBIT margin of approximately 16% at guidance mid-point. Looking ahead, several significant contracts and projects for 2027, including a five-year Spanish MoD contract and a tender for 800 vehicles by the Austrian MoD, could boost growth.

Despite the withdrawal of Red Cat's preliminary acquisition proposal, Steyr Motors' strategic value remains strong, with its compact engines offering unique advantages in the defense sector. This positions Steyr Motors as a potential acquisition target in the future.