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Knorr-Bremse
(OTC:KNRRY)
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Rating:72Outperform
Price Target:
$33.00
▲(8.66% Upside)
Action:Upgraded
Date:08/03/26
The score is driven primarily by solid underlying financial performance (strong and growing free cash flow, improving margins, and de-leveraging) and a notably positive earnings update (raised FY-2026 guidance alongside strong Q2 profitability and cash/ROCE improvement). Offsetting factors are a relatively expensive valuation (P/E ~28) and only modest technical conviction given price is near key moving averages and momentum indicators are unavailable.
Positive Factors
Strong free cash flow generation
Sustained high free cash flow and strong FCF growth support reinvestment, dividends, and debt reduction without relying on new financing. Covering ~79% of net income signals durable internal funding for capex, R&D and portfolio moves, improving financial flexibility over multiple years.
Negative Factors
Meaningful absolute debt level
Although leverage is improving (debt‑to‑equity ~0.77), the sizable absolute debt burden limits cushion during demand shocks and constrains optionality for large strategic investments. If volumes decline, servicing and refinancing could pressure cash flow and slow execution of growth plans.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Sustained high free cash flow and strong FCF growth support reinvestment, dividends, and debt reduction without relying on new financing. Covering ~79% of net income signals durable internal funding for capex, R&D and portfolio moves, improving financial flexibility over multiple years.
Read all positive factors
Knorr-Bremse (KNRRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.19B
Dividend Yield1.87%
Average Volume (3M)2.27K
Price to Earnings (P/E)28.5
Beta (1Y)0.71
Revenue Growth8.39%
EPS Growth47.80%
CountryUS
Employees30,913
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.92
Shares Outstanding644,800,000
10 Day Avg. Volume1,492
30 Day Avg. Volume2,273
Financial Highlights & Ratios
PEG Ratio2.01
Price to Book (P/B)5.27
Price to Sales (P/S)2.09
P/FCF Ratio20.48
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.33
Revenue Forecast (FY)$9.56B
Knorr-Bremse Business Overview & Revenue Model
Company Description
Knorr-Bremse AG, established in 1905 and headquartered in Munich, Germany, is a global leader in designing, manufacturing, selling, and maintaining advanced systems for both railway and commercial vehicles. The company operates through two primary...
How the Company Makes Money
Knorr-Bremse makes money mainly by designing, manufacturing, and servicing braking and safety-related systems sold into two end markets: (1) Rail Vehicle Systems: Revenue is generated from supplying original equipment (OE) to rail vehicle manufact...
Knorr-Bremse Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call was overall constructive and optimistic: the group reported strong Q2 revenue growth (>6% organic), record quarterly profitability (14.2% EBIT margin, +110 bps YoY), materially improved cash generation and ROCE, and raised full‑year guidance. Both Rail and Truck divisions showed improved margins and order book/backlog strength (RVS backlog ~€5.9bn; CVS order book ~€2bn). Management completed the stated portfolio rotation (sold ~€750m revenue) and launched a clear Growth Beyond strategy with concrete 2030 targets (organic €10bn, ~16% margin, ROCE>25%, cash conversion>90%). Key negatives include a dip in RVS quarterly order intake (-12%), continued headwinds in truck markets and FX (approx. €500m revenue impact since 2022), slower-than-expected adoption of e-mobility/ADAS reducing content-per-vehicle upside, and some M&A/investment execution noise (Nexxiot write-down, duagon integration). On balance the positive operational and financial momentum, guidance raise, and clear strategic targets outweigh the challenges noted.Positive Updates
Raised 2026 Guidance
Management increased full-year 2026 guidance: revenues €8.1–8.3bn, operating EBIT margin 14.0%–14.5%, and free cash flow €750–850m (management expects the upper end).
Negative Updates
RVS Order Intake Softness in the Quarter
RVS order intake decreased 12% YoY to ~€1.14bn, resulting in a book-to-bill of 0.96 for the quarter (management emphasized rail order lumpiness and noted this as not indicative of longer-term strength).
Read all updates
Q2-2026 Updates
Positive
Negative
Raised 2026 Guidance
Management increased full-year 2026 guidance: revenues €8.1–8.3bn, operating EBIT margin 14.0%–14.5%, and free cash flow €750–850m (management expects the upper end).
Read all positive updates
Company Guidance
Knorr‑Bremse raised its FY‑2026 guidance to revenues of EUR 8.1–8.3bn with an operating EBIT margin of 14.0–14.5% and free cash flow of EUR 750–850m (management expects the upper end); Q2 results supporting this included group revenues of EUR 2.1bn (organic >6%), order intake >EUR 2.2bn, operating EBIT margin 14.2% (up 110 bps YoY), free cash flow EUR 262m (Q2) / EUR 294m (H1), CapEx EUR 70m (3.3% of revenues), net working capital EUR 1.43bn (63 days) and ROCE 23.8% (up 250 bps). Division guidance: RVS Q2 revenues EUR 1.18bn (organic ~5%), Q2 EBIT margin 17.5% and full‑year RVS margin ~17.5% with order backlog ~EUR 5.9bn (book‑to‑bill 0.96); Truck (CVS) Q2 revenues EUR 959m (organic +8%), Q2 EBIT margin 11.8% (up 150 bps), book‑to‑bill 1.11, and FY‑26 CVS expected to grow low‑ to mid‑single‑digit organically with an ~12% operating margin. Looking to 2030 the group targets ~EUR 10bn organically, ~16% operating EBIT margin, ROCE >25%, and cash conversion >90% (RVS: ~7%+ CAGR and ~20% EBIT margin; CVS: ~12–14% EBIT margin), with R&D ~6% of revenues and CapEx ratio 4–5%; management also noted the HVAC sale (≈EUR 360m included in 2026), ~EUR 750m of disposals under BOOST and headcount reduced to ~29,200.Knorr-Bremse Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
68
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.97B | 7.82B | 7.88B | 7.93B | 7.15B | 6.71B |
| Gross Profit | 2.56B | 4.29B | 4.24B | 4.02B | 3.52B | 3.45B |
| EBITDA | 1.42B | 1.21B | 1.53B | 1.21B | 1.05B | 1.21B |
| Net Income | 586.10M | 512.92M | 445.00M | 552.53M | 489.28M | 621.31M |
Balance Sheet | ||||||
| Total Assets | 9.47B | 9.20B | 9.61B | 8.25B | 8.01B | 7.20B |
| Cash, Cash Equivalents and Short-Term Investments | 1.22B | 1.88B | 2.35B | 1.29B | 1.45B | 1.44B |
| Total Debt | 2.45B | 3.08B | 3.17B | 2.76B | 2.68B | 2.15B |
| Total Liabilities | 6.17B | 6.02B | 6.49B | 5.35B | 5.32B | 4.77B |
| Stockholders Equity | 3.20B | 3.10B | 3.04B | 2.84B | 2.56B | 2.33B |
Cash Flow | ||||||
| Free Cash Flow | 921.89M | 798.20M | 696.00M | 540.00M | 189.41M | 579.96M |
| Operating Cash Flow | 1.17B | 1.02B | 1.04B | 914.59M | 541.55M | 975.49M |
| Investing Cash Flow | -873.17M | -365.00M | -750.00M | -410.64M | -505.00M | -534.37M |
| Financing Cash Flow | -459.74M | -1.09B | 630.00M | -397.67M | -160.81M | -1.42B |
Knorr-Bremse Technical Analysis
Positive
30.37
Price Trends
29.69
Positive
29.53
Positive
29.23
Positive
Market Momentum
<0.01
Positive
50.51
Neutral
40.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNRRY, the sentiment is Positive. The current price of 30.37 is above the 20-day moving average (MA) of 30.00, above the 50-day MA of 29.69, and above the 200-day MA of 29.23, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 50.51 is Neutral, neither overbought nor oversold. The STOCH value of 40.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KNRRY.
Knorr-Bremse Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $19.19B | 28.54 | 18.54% | 1.87% | 8.39% | 47.80% | |
67 Neutral | $3.24B | -18.73 | -13.31% | 1.54% | -15.78% | -355.78% | |
66 Neutral | $10.11B | 18.71 | 27.88% | 0.96% | 37.56% | -28.71% | |
65 Neutral | $12.73B | 30.83 | 7.37% | 1.09% | 2.17% | 111.19% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | $9.08B | 41.28 | 2.41% | 0.97% | -5.40% | -75.68% | |
48 Neutral | $120.68M | -4.86 | -17.17% | ― | -0.42% | 41.05% |
* Consumer Cyclical Sector Average
KNRRY
Knorr-Bremse
29.88
6.00
25.14%
ALSN
Allison Transmission Holdings
118.64
30.54
34.67%
BWA
BorgWarner
62.27
18.36
41.81%
CVGI
Commercial Vehicle Group
3.06
1.12
57.73%
DAN
Dana Incorporated
29.96
9.31
45.11%
APTV
Aptiv
43.34
-28.98
-40.07%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.