OHB Initiated at 'Buy' by Kepler Cheuvreux on European Space Sector Growth

Kepler Cheuvreux initiated coverage of German aerospace company OHB with a 'Buy' rating and a EUR 260 price target, calling the firm a rare opportunity for investors to gain exposure to Europe's strategic build-up in the space and defense sectors.

In a note to clients, analyst Thomas Renaud highlighted OHB's unique position as "one of the few listed ways to gain exposure to Europe’s sovereign space and defence build-up through an end-to-end business model spanning the full space value chain."

Ambitious Growth Projections

Kepler Cheuvreux's positive outlook is underpinned by ambitious growth targets set by OHB's management. The company is aiming for more than EUR 4 billion in revenue (referred to by the group as TOP) in the medium term, a substantial increase from the EUR 1.2 billion recorded in fiscal year 2025.

This revenue goal implies a compound annual growth rate (CAGR) of over 20%. The investment firm projects even faster growth for the bottom line, forecasting that OHB's adjusted EBITDA will grow at a CAGR of more than 30%, driven by operating leverage and an increasing share of higher-margin defense contracts.

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Strategic Advantages and Catalysts

Renaud noted several factors that should support OHB's growth trajectory, including its status as an independent German prime contractor and its long-standing relationships with institutional clients. The analyst also pointed to a recent EUR 0.5 billion capital raise as a key enabler, providing the balance sheet flexibility needed to fund its industrial expansion and compete for larger government programs.

The initiation comes after a period of sharp de-rating for both OHB and the broader space sector. Kepler Cheuvreux identified potential near-term catalysts for the stock, including:

• Stronger order intake expected in the second half of the year.
• Greater visibility on the SATCOMBw4 military satellite communication program in 2027.