Opportunity engine; INITIATE with BUY

The result is a business embedded as single-source supplier on frontline platforms such as Leopard 2, Hawkei and GRF, backed by blue-chip OEMs like Thales, KNDS, Rheinmetall and Urovesa. With decades-long platform lives and limited competition, Steyr converts technical superiority into pricing power, customer lock-in and unusually high earnings visibility for a niche industrial.

Steyr Motors enters a structurally re-arming Europe with a growth pipeline far larger than its current scale suggests, supported by c. € 300m of backlog into 2030e. Defence budgets are rising, equipment shares are expanding, and decades of underinvestment in ground forces are driving a sustained procurement cycle in exactly the subsystems where Steyr is embedded. Main battle tank APUs represent the strongest growth vector, with Leopard 2 A8, KF51 Panther and potentially the K2, offering multi-year, high-probability demand. In parallel, internationalisation across Asia and the US, combined with the new mobile power unit, broadens Steyr’s TAM and supports growth beyond its current core programmes.

Altogether, sales are expected to grow at a 37% CAGR between 2024-28e. At the same time, the EBIT margin looks set to reach 21% by 2028e (eNuW), vs. 2025 guidance of 13-16%, thanks to improving personnel utilization, as only c. 22% of Steyr Motors employees work in production. Importantly, the setup has spare capacity, as Steyr Motors is currently only operating a four day week with one shift model.

Positive news ahead: Steyr Motors’ newly launched mobile power generator is on track for first commercial orders in H1 ‘26e (eNuW), adding a new leg of structural demand. Parallel internationalisation continues to gain traction, with further progress expected in China, India and the US. In addition, several large-scale defence programmes entering procurement in 2026 carry cumulative revenue potential well above € 100m for Steyr Motors, underpinning a pipeline that should act as a meaningful catalyst for the shares.

INITIATE Steyr Motors with BUY, PT € 59, based on DCF.

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