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Knorr-Bremse AG (DE:KBX)
XETRA:KBX
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Knorr-Bremse AG
(XETRA:KBX)
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Rating:70Neutral
Price Target:
€102.00
▼(-8.52% Downside)
Action:ReiteratedDate:12/18/25
Knorr-Bremse AG's overall stock score is driven by strong earnings call results and positive technical indicators. However, financial performance concerns and high valuation metrics slightly offset these strengths.
Positive Factors
Strategic Acquisitions
The acquisition of Duagon strengthens Knorr-Bremse's position in electronics and software, unlocking synergies and expanding its digital market presence, which is crucial for long-term growth in the evolving transportation industry.
Order Intake Growth
Strong order intake indicates robust demand for Knorr-Bremse's products, supporting future revenue growth and enhancing its competitive position in the rail and commercial vehicle systems markets.
Improved EBIT Margins
The improvement in EBIT margins reflects operational efficiency and effective cost management, which are critical for sustaining profitability and competitive advantage in the long term.
Negative Factors
Declining Revenue Growth
A significant decline in revenue growth can impact Knorr-Bremse's ability to invest in new technologies and maintain its market position, posing a risk to its long-term growth prospects.
Challenges in North American Market
The downturn in the North American truck market affects Knorr-Bremse's revenue and workforce, highlighting vulnerabilities in market diversification and the need for strategic adjustments.
Declining Free Cash Flow
Declining free cash flow growth limits Knorr-Bremse's ability to fund operations and strategic initiatives, potentially constraining future growth and financial flexibility.
Knorr-Bremse AG (KBX) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€18.41B
Dividend Yield1.85%
Average Volume (3M)156.00K
Price to Earnings (P/E)34.3
Beta (1Y)1.18
Revenue Growth-1.77%
EPS Growth-28.68%
CountryDE
Employees29,051
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.74
Shares Outstanding161,200,000
10 Day Avg. Volume150,031
30 Day Avg. Volume155,999
Financial Highlights & Ratios
PEG Ratio-1.32
Price to Book (P/B)3.72
Price to Sales (P/S)1.44
P/FCF Ratio16.26
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€110.13Price Target Upside-1.23% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)4.61
Revenue Forecast (FY)€8.25B
Knorr-Bremse AG Business Overview & Revenue Model
Company DescriptionKnorr-Bremse Aktiengesellschaft develops, produces, markets, and services braking and other systems for rail and commercial vehicles worldwide. The company operates in two segments, Rail Vehicle Systems and Commercial Vehicle Systems. It offers braking, entrance and HVAC systems; power electrics and control technology; digital solutions for optimization of rail traffic, couplers; signal systems; stationary and mobile testing equipment; wiper and wash systems; and sanitary systems for mass transit and long distance rail vehicles. The company also provides braking systems comprising brake control systems, disk brakes, drum brakes, brake cylinders, valves and pedal units; steering systems and vehicle dynamics solutions; driver assistance systems; automated driving and electronic leveling control; energy supply and distribution systems, including compressors and air treatment products; and engine components and transmission control systems for trucks, buses, trailers, and agricultural machinery. In addition, it offers leasing, holding, logistics, and media and IT services. The company was founded in 1905 and is headquartered in Munich, Germany. Knorr-Bremse Aktiengesellschaft is a subsidiary of KB Holding GmbH.
How the Company Makes MoneyKnorr-Bremse generates revenue through the sale of its products and services in the rail and commercial vehicle systems markets. Key revenue streams include the sale of braking systems, electronic control systems, and other safety-related components. The company also earns income from providing maintenance, repair, and retrofit services for existing systems. Significant partnerships with major vehicle manufacturers and operators enhance its market presence and revenue potential. Furthermore, investments in research and development enable KBX to introduce new products and technologies, meeting evolving industry demands and expanding its customer base.
Knorr-Bremse AG Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call highlights substantial operational and financial progress: record free cash flow, improved margins (group margin +70 bps to 13%), rail hitting midterm margin a year early, stronger balance sheet (net debt down 31%), orderbook/backlog growth, and clear 2026 guidance. These positives are balanced by continued truck-market weakness in North America, some regional and timing softness in RVS orders (Q4 order intake -10% and book-to-bill <1 in the quarter), a pending HVAC divestment and FX/M&A headwinds. Management communicated a cautious but constructive outlook with an emphasis on efficiency (BOOST Phase 2) and targeted greenfield growth, suggesting confidence in execution while acknowledging near-term cyclical and regional risks.Q4-2025 Updates
Positive Updates
Strong Full-Year Revenues and Organic Growth
Total revenues of almost EUR 8.0 billion for FY2025 with slight organic growth (group level). Q4 revenues ~EUR 2.0 billion with organic growth of >6%.
Improved Group Profitability
Operating EBIT margin increased by 70 basis points to 13.0% for FY2025. Q4 operating margin rose to 13.5% year-over-year.
Rail Division Outperformance
Rail (RVS) delivered margin-accretive growth and reached its midterm target margin one year early at 16.5% for FY2025. RVS Q4 operating EBIT margin rose 140 bps to 17.0%; Q4 revenues nearly EUR 1.1 billion (3% YoY, +7% organic).
Record Free Cash Flow and Exceptional Cash Conversion
FY2025 free cash flow of EUR 790 million (record) and an operating cash conversion rate of 131% (would be ~138% excluding ~EUR 80 million severance one-offs). Q4 FCF was EUR 471 million.
Balance Sheet Strength and Deleveraging
Net debt declined 31% to EUR 627 million; net debt/EBITDA just below 0.5. Equity nearly EUR 3.2 billion with an equity ratio of 36%. Liquidity around EUR 1.7 billion (operational liquidity up ~15% after bond repayment).
Order Intake and Backlog Momentum
Order intake +6% organically and backlog +8% organically year-over-year for FY2025. RVS year-end order book ~EUR 5.6 billion (backlog organically +9%). Q4 order intake ~EUR 2 billion (+~6% organic) with book-to-bill around 1 for the year.
BOOST Program and Efficiency Gains
BOOST fix-it measures improved breakeven by ~400 basis points and supported margin expansion. Headcount reduced by >2,400 over three years; CapEx optimized to EUR 319 million (4.1% of revenues, down EUR 30 million YoY). ROCE improved to 22.8% (increase of ~200 bps).
Truck Aftermarket and Digital Platform Progress
CVS strengthened aftermarket and digital capabilities (Cojali >EUR 130 million revenues with attractive EBIT margin). CVS quarter order intake EUR 977 million (+~10% YoY; +20% organic YoY for the quarter) and Q4 operating EBIT margin improved to 11.3% (up 180 bps YoY).
Clear 2026 Guidance
Management issued FY2026 guidance: revenues EUR 8.0–8.3 billion, group EBIT margin ~14% and free cash flow EUR 750–850 million, supporting continuity of strategy and confidence in execution.
Sustainability Progress
Since 2018, Scope 1 & 2 CO2 emissions reduced by 79%; self-produced renewable power increased by 41%. EU taxonomy aligned revenues slightly increased, supported by RVS share.
Negative Updates
Truck OEM Market Weakness in North America
CVS experienced continued headwinds in North America: full-year regional declines (OE business down significantly in North America) and North America aftermarket down ~10% in Q4. CVS full-year revenues decreased nominally by 4% to EUR 881 million (though organic growth >5%). Management expects only a gradual recovery rather than a sharp rebound.
RVS Order Intake Softness in Q4
RVS Q4 order intake declined ~10% YoY (driven by all regions except China and affected by FX). Q4 book-to-bill for RVS was 0.91, indicating some quarterly timing shifts (management noted an order of ~EUR 50–100m shifted into 2026).
China Market Normalization Risk
Management expects Chinese rail activity to normalize in 2026 after strong 2024–25 demand; guidance embeds a potential modest revenue reduction in China of ~EUR 30–50 million versus 2025 (mainly metros).
HVAC Disposal Still Pending
HVAC classified as 'asset held for sale' and sales process is advanced but not completed; timing and valuation are uncertain as management prefers a long-term sustainable solution rather than a forced sale.
One-off Severance and Other Non-Recurring Costs
Around EUR 80 million of severance-related one-offs in 2025 impacted reported cash conversion calculations and represent restructuring costs tied to efficiency measures.
FX and M&A Headwinds Impacting Reported Growth
Reported CVS revenues were negatively impacted by M&A accounting and foreign exchange effects despite healthy organic growth; management highlighted FX and M&A as offsetting positive organic momentum.
Seasonality and Near-Term Q1 Headwinds
Management flagged typical seasonality for Q1 (weaker aftermarket activity and Chinese New Year impact in RVS) and expects Q1 profitability to be seasonally weaker before improving through the year.
Company Guidance
The company guided to FY‑2026 revenues of EUR 8.0–8.3 bn, a group operating EBIT margin of 14% and free cash flow of EUR 750–850 m, while reiterating a CapEx envelope of c.4–5% of revenues and a seasonal FCF profile similar to 2025; Rail (RVS) is expected to sustain a book‑to‑bill around 1 (quarterly order intake c. EUR 1.0–1.2 bn) with FY operating margin slightly below 17.5% (Q4’25 was 17.0% and Q2–Q4 margins are expected to be above Q1), and Truck (CVS) is guided to low‑ to mid‑single‑digit organic revenue growth with operating EBIT margin improving toward ~12% through the year; balance sheet flexibility remains strong (net debt/EBITDA ~0.5x at year‑end ’25) and management said it would consider leverage up to ~1x (or higher for clearly accretive M&A), with updated mid‑term targets to be published with Q2 results on 30 July.Knorr-Bremse AG Financial Statement Overview
Summary
Knorr-Bremse AG demonstrates strong profitability margins and improved leverage, but faces risks due to significant declines in revenue and free cash flow growth.Income Statement
Knorr-Bremse AG's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 35.2%, which is concerning. However, the company maintains a solid gross profit margin of 46.45% and a net profit margin of 5.37%. The EBIT and EBITDA margins are also healthy at 9.83% and 14.81%, respectively, indicating operational efficiency despite the revenue drop.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.08, which is an improvement from previous years, indicating better leverage management. The return on equity (ROE) stands at 14.04%, showing decent profitability. The equity ratio is not explicitly provided, but the overall asset base and equity levels suggest a balanced capital structure.70
Positive
Cash Flow
Cash flow analysis reveals challenges in free cash flow growth, which decreased by 6.91% in the TTM period. The operating cash flow to net income ratio is 0.43, and the free cash flow to net income ratio is 0.77, indicating that the company generates sufficient cash relative to its net income, but the declining free cash flow growth is a concern.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.83B | 7.88B | 7.93B | 7.15B | 6.71B | 6.16B |
| Gross Profit | 3.05B | 4.24B | 4.02B | 3.52B | 3.45B | 3.26B |
| EBITDA | 1.20B | 1.11B | 1.21B | 1.05B | 1.21B | 1.06B |
| Net Income | 434.99M | 445.00M | 552.53M | 489.28M | 621.31M | 495.50M |
Balance Sheet | ||||||
| Total Assets | 8.78B | 9.63B | 8.25B | 8.01B | 7.20B | 7.39B |
| Cash, Cash Equivalents and Short-Term Investments | 1.40B | 2.26B | 1.29B | 1.45B | 1.44B | 2.32B |
| Total Debt | 3.13B | 4.03B | 2.76B | 2.68B | 2.15B | 2.98B |
| Total Liabilities | 5.67B | 6.50B | 5.35B | 5.32B | 4.77B | 5.47B |
| Stockholders Equity | 3.03B | 3.04B | 2.84B | 2.56B | 2.33B | 1.83B |
Cash Flow | ||||||
| Free Cash Flow | 811.85M | 696.00M | 539.43M | 189.41M | 579.96M | 674.34M |
| Operating Cash Flow | 1.06B | 1.04B | 914.59M | 541.55M | 975.49M | 1.04B |
| Investing Cash Flow | -269.30M | -750.30M | -410.64M | -505.00M | -534.37M | -576.39M |
| Financing Cash Flow | -1.12B | 629.10M | -397.67M | -160.81M | -1.42B | -10.37M |
Knorr-Bremse AG Technical Analysis
Positive
111.50
Price Trends
100.83
Positive
92.38
Positive
89.15
Positive
Market Momentum
3.80
Negative
69.79
Neutral
79.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:KBX, the sentiment is Positive. The current price of 111.5 is above the 20-day moving average (MA) of 106.53, above the 50-day MA of 100.83, and above the 200-day MA of 89.15, indicating a bullish trend. The MACD of 3.80 indicates Negative momentum. The RSI at 69.79 is Neutral, neither overbought nor oversold. The STOCH value of 79.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:KBX.
Knorr-Bremse AG Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Neutral | €18.41B | 34.29 | 14.52% | 1.85% | -1.77% | -28.68% | |
68 Neutral | €902.44M | 16.20 | 11.63% | 5.70% | -12.01% | -28.10% | |
62 Neutral | €9.26B | 57.32 | 5.24% | 1.17% | <0.01% | -50.97% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | €14.94B | 60.26 | -1.10% | 2.88% | -38.10% | -75.32% | |
52 Neutral | €10.27B | -7.26 | -34.39% | 3.15% | 45.16% | -790.24% | |
46 Neutral | €276.57M | -2.48 | -16.55% | 3.51% | -6.21% | -995.53% |
* Consumer Cyclical Sector Average
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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.