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How Investors May Respond To thyssenkrupp (XTRA:TKA) Being Tied To Rising EV Magnesium Component Demand

Simply Wall St · 4d ago
  • In recent days, attention has turned to thyssenkrupp as industry reports highlighted growing opportunities in magnesium automotive parts, driven by electric vehicle adoption and stricter emission regulations, with the company named alongside global peers as a key supplier.
  • An interesting angle is the strong growth potential identified in the Asia-Pacific magnesium components market, which could reshape where and how thyssenkrupp prioritizes its automotive materials exposure.
  • We will now explore how rising magnesium component demand for electric vehicles might influence thyssenkrupp’s existing investment narrative and risk profile.

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thyssenkrupp Investment Narrative Recap

To own thyssenkrupp, you need to believe that its ongoing restructuring, Marine Systems backlog and decarbonization efforts can gradually translate into more stable, profitable growth despite soft demand and high fixed costs. The latest magnesium automotive parts news supports the longer term materials story but does not materially change the near term focus, which still sits on executing steel downsizing and improving earnings quality while managing macro and restructuring risks.

The recent plan to reduce Thyssenkrupp Steel Europe’s workforce to about 16,000 by 2030 is particularly relevant here, as it underlines management’s push to lower structural costs at a time when new opportunities in lighter automotive materials are emerging. How effectively thyssenkrupp can rebalance capital between underperforming legacy units and potentially higher value segments, such as advanced materials and green technologies, remains central to how these catalysts ultimately play out for shareholders.

Yet alongside these opportunities, investors should be aware of the ongoing risk that high capital tied up in underperforming segments could still...

Read the full narrative on thyssenkrupp (it's free!)

thyssenkrupp’s narrative projects €37.0 billion revenue and €1.5 billion earnings by 2028. This requires 3.5% yearly revenue growth and about a €2.7 billion earnings increase from €-1.2 billion today.

Uncover how thyssenkrupp's forecasts yield a €10.30 fair value, a 7% upside to its current price.

Exploring Other Perspectives

XTRA:TKA 1-Year Stock Price Chart
XTRA:TKA 1-Year Stock Price Chart

Sixteen fair value estimates from the Simply Wall St Community span from €7.29 to €42.40, showing how differently people assess thyssenkrupp’s prospects. When you weigh those views against the company’s reliance on restructuring and cost cutting for recent earnings improvement, it underlines why many prefer to compare several perspectives before forming an opinion.

Explore 16 other fair value estimates on thyssenkrupp - why the stock might be worth 24% less than the current price!

Build Your Own thyssenkrupp Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.