Knorr-Bremse AG (KBX) AI Stock Analysis

• Market Cap: €15.97B
• Dividend Yield: 1.85%
• Average Volume (3M): 156.00K
• Price to Earnings (P/E): 28.6
• Beta (1Y): 1.13
• Revenue Growth: -1.77%
• EPS Growth: -28.68%
• Country: DE
• Employees: 29,051
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.74
• Shares Outstanding: 161,200,000
• 10 Day Avg. Volume: 150,031
• 30 Day Avg. Volume: 155,999
• PEG Ratio: 1.41
• Price to Book (P/B): 5.29
• Price to Sales (P/S): 2.10
• P/FCF Ratio: 19.75
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €110.73
• Price Target Upside: 15.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 4.59
• Revenue Forecast (FY): €8.26B

• Rating: 60 Neutral
• Price Target: €101.00 ▲(5.32% Upside)
• Action: Reiterated Date: 03/23/26
• Date: Action: Reiterated 03/23/26

The score is driven primarily by solid financial quality—especially strong recent free cash flow—plus supportive 2026 guidance and improving profitability from the earnings call. These positives are tempered by weak technical momentum (below key moving averages with negative MACD) and a relatively high P/E with only a modest dividend yield.

Positive Factors

Strong free cash flow generation

Consistently strong cash conversion and a record FCF position management to fund capex, deleveraging, and shareholder returns without relying on external financing. Over 2024–25 operating cash remained >€1bn, giving durable liquidity to navigate cyclicality and invest in strategic initiatives.

Sustained margin improvement and BOOST efficiency gains

Structural cost and efficiency actions (BOOST) materially improved breakeven and supported a higher operating margin base. Coupled with RVS hitting midterm targets early, this suggests sustainable operational leverage and better resilience to volume swings, raising long-term ROCE and profit stability.

Material deleveraging and liquidity buffer

Substantial debt reduction and ample liquidity improve financial flexibility for targeted M&A, cyclical downturns, or working-capital demands. A lower leverage ratio reduces refinancing risk and supports the company’s ability to pursue accretive projects while maintaining investment-grade-like resilience.

Negative Factors

Recent revenue softness

A roughly 10% revenue decline in 2025 signals demand and timing pressures that can persist across quarters. Lower top-line weakens fixed-cost absorption, increases reliance on aftermarket and margin recovery, and creates execution risk if end-market cycles (trains, trucks) remain muted for several quarters.

Meaningful historical leverage

Although deleveraging progressed, debt levels remain material relative to equity, limiting flexibility in prolonged downturns. This amplifies sensitivity to cyclical hits in OEM volumes and constrains appetite for large-scale M&A or aggressive buybacks absent continued strong cash generation.

Market and regional cyclicality with pending divestment uncertainty

Structural exposure to OEM cycles and regional weakness (notably North American truck demand and periodic RVS order timing) creates revenue volatility. A pending HVAC divestment remains unresolved, adding strategic and execution uncertainty until completed and realized proceeds or synergies are clear.

Knorr-Bremse AG Business Overview & Revenue Model

Company Description

Knorr-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 Money

Knorr-Bremse makes money mainly by selling OEM (original equipment) systems and components to vehicle manufacturers and by generating recurring revenue from aftermarket parts and services over the life of vehicles and rail fleets. Key revenue streams: 1) Rail Vehicle Systems: Revenue comes from supplying braking systems and other onboard rail subsystems (e.g., pneumatic equipment, control systems, and other safety/efficiency-related modules) to train manufacturers and operators as part of new-build projects, modernizations, and retrofits. A significant portion is also generated through lifecycle support, including spare parts, maintenance-related services, and upgrades for installed rail fleets. 2) Commercial Vehicle Systems: Revenue comes from providing braking and related vehicle dynamics/safety systems for trucks, buses, and trailers (e.g., electronic braking and stability/driver assistance-related components, air management and pneumatic systems). Similar to rail, the division earns meaningful recurring revenue through the aftermarket via replacement parts, service support, and workshop/maintenance ecosystem demand tied to the installed base of commercial vehicles. How the model works: - OEM/new equipment sales typically occur through multi-year platform and project supply relationships with rail rolling-stock manufacturers and commercial-vehicle OEMs/Tier partners, where Knorr-Bremse supplies validated systems/components integrated into vehicle designs. - Aftermarket revenue is driven by the long service life of rail vehicles and commercial vehicles, regulatory and safety requirements, wear-and-tear replacement cycles, and periodic maintenance/overhaul needs. This installed-base dynamic tends to support repeat purchases of original spare parts and service solutions. Significant factors contributing to earnings: - A large installed base in both rail and commercial vehicles supports recurring parts and service demand. - Regulatory safety requirements and high reliability needs in braking and safety systems can create high switching costs and preference for established, certified suppliers. - Exposure to rail fleet expansion/modernization cycles and commercial vehicle production cycles influences new-equipment demand, while the aftermarket provides longer-cycle, more recurring revenue. Partnerships: null

Knorr-Bremse AG Financial Statement Overview

Summary

Cash flow is strong (operating cash flow >€1.0B in 2024–2025 and FCF ~€0.83B in 2025), supporting resilience and shareholder returns. Offsetting this, revenue has been soft (down ~10% in 2025) and the balance sheet shows meaningful leverage (debt roughly ~1.0x equity in 2025, higher in 2024), which raises cyclical risk if the slowdown persists.

Income Statement

Revenue has been soft recently (down ~10% in 2025 after being roughly flat in 2024), indicating demand or pricing pressure. Profitability is still reasonable with EBIT margins generally around ~9–14% over the period, but margins have stepped down from 2021 highs and net margin remains mid-single to high-single digits. Net income improved in 2025 versus 2024, but the inconsistent gross profit levels/margins between years suggest volatility and lower visibility on underlying cost structure.

Balance Sheet

Leverage is meaningful: debt is roughly in line with equity in 2025 (about 1.0x) and was higher in 2024 (about 1.3x), which increases sensitivity to cyclical downturns. The company does generate solid shareholder returns (return on equity in the mid-teens to mid-20s across the period), a clear strength. However, the balance sheet is not especially conservative for an Auto - Parts business, and the elevated debt levels limit flexibility if the revenue decline persists.

Cash Flow

Cash generation is a bright spot: operating cash flow exceeded €1.0B in both 2024 and 2025 and free cash flow rose strongly in 2025 (to ~€0.83B). Free cash flow has generally covered a large share of net income (roughly ~59–78% in recent years), supporting balance sheet capacity and shareholder returns. The main weakness is variability—free cash flow dipped materially in 2022—showing cash conversion can fluctuate with working capital and investment cycles.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.82B	7.88B	7.93B	7.15B	6.71B
Gross Profit	1.69B	4.24B	4.02B	3.52B	3.45B
EBITDA	903.30M	1.11B	1.21B	1.05B	1.21B
Net Income	574.40M	445.00M	552.53M	489.28M	621.31M
Balance Sheet
Total Assets	9.21B	9.63B	8.25B	8.01B	7.20B
Cash, Cash Equivalents and Short-Term Investments	1.74B	2.26B	1.29B	1.45B	1.44B
Total Debt	3.08B	4.03B	2.76B	2.68B	2.15B
Total Liabilities	6.03B	6.50B	5.35B	5.32B	4.77B
Stockholders Equity	3.10B	3.04B	2.84B	2.56B	2.33B
Cash Flow
Free Cash Flow	831.00M	696.00M	539.43M	189.41M	579.96M
Operating Cash Flow	1.07B	1.04B	914.59M	541.55M	975.49M
Investing Cash Flow	-380.00M	-750.30M	-410.64M	-505.00M	-534.37M
Financing Cash Flow	-1.13B	629.10M	-397.67M	-160.81M	-1.42B

Knorr-Bremse AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 95.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:KBX, the sentiment is Negative. The current price of 95.9 is below the 20-day moving average (MA) of 104.77, below the 50-day MA of 103.35, and above the 200-day MA of 90.37, indicating a neutral trend. The MACD of -2.07 indicates Positive momentum. The RSI at 35.87 is Neutral, neither overbought nor oversold. The STOCH value of 15.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:KBX.

Knorr-Bremse AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SFQ	62 Neutral	€779.87M	13.62	11.14%	5.70%	-12.01%	-28.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KBX	60 Neutral	€15.97B	28.57	18.07%	1.85%	-1.77%	-28.68%
HLE	54 Neutral	€8.18B	110.15	5.24%	1.17%	<0.01%	-50.97%
CON	50 Neutral	€11.95B	-82.38	-1.10%	2.88%	-38.10%	-75.32%
ZIL2	46 Neutral	€275.62M	-16.43	-18.51%	3.51%	-6.21%	-995.53%
SHA0	45 Neutral	€6.54B	-18.63	-34.39%	3.15%	45.16%	-790.24%