The Thyssenkrupp stock has recently turned a corner, surpassing the 10-Euro mark for the first time in weeks, as investors react positively to the company’s future prospects. With an annual high of 10.95 Euros now in sight, the stock's recovery marks a significant shift in sentiment for the beleaguered steel and defense giant.
At the end of last year, Thyssenkrupp announced a major restructuring plan that involves cutting 11,000 of its 26,000 jobs in the steel business, with 5,000 positions set to be eliminated. This announcement initially sparked fears among employees and investors alike. However, recent negotiations between Thyssenkrupp and the IG Metall union, led by Christiane Benner, have brought a glimmer of hope. Benner stated in an interview with the Rheinische Post, "We will find a socially acceptable solution that enables the production of green steel in NRW." She expressed optimism about the negotiations but emphasized that the workforce is ready to fight against layoffs and plant closures.
Benner also called for improved conditions across the industry, including the introduction of an industrial electricity price to support the transition to climate-neutral steel production. "The path to climate-neutral steel production must be further promoted, even beyond Thyssenkrupp. It also concerns smaller forges and foundries," she explained.
Initially, IG Metall had rejected negotiations with Thyssenkrupp, but the current discussions signal a positive turn. However, the company’s steel business remains a significant concern, especially in light of potential economic slowdowns influenced by U.S. trade policies under President Donald Trump. On a more optimistic note, the marine division, Thyssenkrupp Marine Systems (TKMS), is expected to play a crucial role in the company’s recovery, with plans to potentially spin off this division as it remains a highly sought-after asset in the defense sector.
As the stock market opened on Friday, May 2, 2025, the mood was cautiously optimistic, particularly following Thyssenkrupp’s 1.9% jump earlier in the week. The company is not heavily reliant on U.S. market conditions, which bodes well for its future. The anticipation is building for the upcoming second-quarter financial results, scheduled to be released on May 15, which analysts expect to be strong.
Moreover, significant political changes are on the horizon in Germany, with Friedrich Merz set to become Chancellor following elections on May 6. The new government will include the SPD’s Defense Minister, Boris Pistorius, who is expected to push for increased military spending. Germany has already submitted a request to the EU to finance arms purchases through new debt, which could significantly benefit Thyssenkrupp and its subsidiaries.
Analysts estimate that the EU could invest up to 1 trillion euros in defense by 2030, a boon for companies like Thyssenkrupp and TKMS, which specializes in building submarines and frigates. The upcoming government is likely to prioritize defense spending, which is expected to increase demand for Thyssenkrupp’s military products.
In addition to the strong political backing, Thyssenkrupp's plans for an initial public offering (IPO) of its subsidiary TKMS later this year are generating excitement. Analysts predict that this IPO will reveal hidden values within the company’s balance sheet, potentially boosting the stock’s value significantly. Thyssenkrupp has committed to retaining at least 51% of the new TKMS shares, ensuring that the parent company maintains a strong stake in its most valuable division.
With the stock currently trading above the 10 Euro mark, analysts believe that Thyssenkrupp has cleared significant hurdles, with a potential target of 12.03 Euros, which represents the company’s five-year high. Given the favorable political climate and the anticipated demand for defense products, the outlook for Thyssenkrupp appears promising.
However, the company must navigate the complexities of labor relations and market conditions carefully. As the negotiations with IG Metall progress, the stakes are high. The workforce is mobilized, ready to defend their jobs, while the company seeks to balance its restructuring needs with the demands for sustainable practices.
In summary, Thyssenkrupp is at a pivotal moment. Investors are watching closely as the company’s stock rises, buoyed by expectations of a robust second quarter, political support for defense spending, and strategic decisions regarding its subsidiaries. The coming weeks will be critical in determining whether Thyssenkrupp can sustain its momentum and secure its place as a leader in both the steel and defense industries.
