OHB SE Coverage Initiated by Jefferies, Goldman Sachs on European Space Spending

Jefferies and Goldman Sachs have initiated coverage on German aerospace company OHB SE, with both investment banks identifying surging European space and defense spending as a major tailwind, though they diverge on the company's current valuation.

Divergent Ratings on Valuation

Jefferies launched its coverage with a 'Buy' rating and a price target of €280, implying approximately 20% upside from the prior closing price of €233.50. The bank's analysts argue that OHB's shares are attractively valued after a broader sector downturn, noting its valuation of 2.7 times projected 2027 sales is below the 2.9 times average for its European defense peers.

In contrast, Goldman Sachs began its coverage with a 'Neutral' rating and a €250 price target. Goldman analysts acknowledged OHB's position as a rare pure-play European space company but suggested that a recent significant rally in its stock has already priced in a substantial portion of its long-term growth opportunities.

Bull Case Hinges on Government Spending

Despite their different ratings, both firms agree that OHB is a prime beneficiary of expanding public investment in Europe's space and defense sectors. This structural demand is expected to fuel the company's growth for years to come.

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Key budget increases and programs cited by the banks include:

• A 32% increase in the European Space Agency's (ESA) budget for 2026-2028, with committed funds of €22.3 billion.
• A proposed €131 billion European Union budget for defense, security, and space for the 2028-2034 period.
• Germany's plan to invest €35 billion in military space capabilities by 2030.

Growth Forecasts and Key Risks

Both banks project robust growth. Goldman Sachs forecasts OHB's total operating performance to grow from €1.25 billion in 2025 to over €4.0 billion by 2030, a compound annual growth rate (CAGR) of about 26%. Jefferies sees revenue rising from €1.45 billion in 2026 to €2.35 billion in 2028, with adjusted EBITDA margins expanding to 13% by 2030 due to operating leverage and a greater share of high-margin defense work.

Jefferies identified potential catalysts in upcoming military satellite contracts, while Goldman Sachs highlighted the company's record €3.4 billion order backlog and a pipeline of identified opportunities worth approximately €200 billion. However, analysts also pointed to several risks, including execution on fixed-price contracts, dependency on government funding, and the inaugural launch risk for the RFA ONE rocket from its subsidiary, Rocket Factory Augsburg.