Renk Group poised to benefit from Italy's 5 billion euro tank program

The Italian Ministry of Defence has initiated a procurement program for new combat tanks valued at more than 5 billion euros. This large-scale vehicle program is expected to benefit the Renk Group, a key supplier of drive and transmission technology.

Following the announcement, mwb research raised its medium-term estimates and increased its price target for Renk Group shares from 48 to 53 euros, maintaining a buy recommendation. The research house noted that while the war in Ukraine has increased the importance of drones, the Italian procurement serves as evidence that nations continue to allocate significant budgets for modern combat tanks.

Beyond new sales, the company aims to expand its aftermarket business, which includes maintenance, spare parts, and modernizations. Renk Group has set targets to increase annual aftermarket revenues from approximately 500 million euros to 1 billion euros by 2030, and up to 2 billion euros by 2035.