Deutsche Bank moved Thyssenkrupp Nucera AG & Co. KGaA (ETR:NCH2) from a "buy" recommendation to a "hold" on Monday and lowered its price objective to €10 from €11. The change followed a profit warning in mid-March that the bank says materially altered expectations for near-term earnings at the German electrolyser manufacturer.
The downgrade came after a concentrated period of company announcements in mid-March that Deutsche Bank characterized as turbulent. Those events included a severe profit warning, the announcement of a project win with Moeve, and the initiation of a front-end engineering and design (FEED) study in India. Analyst Michael Kuhn framed the rating action as a reaction to that string of developments.
"While the shares have traded sideways recently, the profit warning has materially reset near-term earnings expectations," Kuhn said.
At the heart of Deutsche Bank's concern is what it describes as a weak pipeline for green-hydrogen orders, commonly referred to in the industry as gH2. As a result of that assessment, the bank now anticipates no further major gH2 order wins for Thyssenkrupp Nucera in fiscal years 2025 and 2026.
Market reaction was immediate: shares of the company fell by more than 3% on the day the downgrade was announced. Deutsche Bank's revised outlook positions the stock as offering a balanced risk-return profile in the absence of concrete evidence of a sustained pickup in gH2 order momentum.
The bank's stance emphasizes the linkage between order visibility for green-hydrogen projects and short-term earnings expectations for an electrolyser maker. Until there is tangible proof of renewed large-scale gH2 contracting, the analyst view is cautious.
Context and implications
- Deutsche Bank's rating move reflects a reassessment of near-term earnings after a mid-March profit warning and related corporate developments.
- The bank cited a weak gH2 order pipeline and is not forecasting major order wins for fiscal 2025 and 2026.
- Shares reacted negatively, declining by over 3% on the downgrade news.
What the analyst said
Michael Kuhn noted the company's recent run of newsflow and emphasized that the profit warning had a material impact on short-term earnings expectations. He concluded that the stock offers a balanced risk-return profile until there is clear evidence of a sustained recovery in gH2 order activity.