VINCORION: Fundamentally, everything is "smooth sailing"!

Last week, shares of the defense contractor VINCORION suffered a brief dip of just under -6%, pushing the price to just under EUR 18. What happened? Quite simply: On September 16, the 180-day lock-up period following the initial public offering expired; STAR-Capital, which holds a 47.5% stake, can or could now dump shares from its portfolio onto the market, which would put pressure on the stock given its relatively illiquid nature. But does this even make sense from their perspective, given an IPO price of EUR 17? Hardly! The short-term decline in the stock price—which temporarily recovered on Friday—definitely has nothing to do with the fundamental outlook. There remains significant upside potential in terms of both price and earnings!

Fundamentally, investors are currently grappling with the question of why the European defense sector initially posted strong gains on the stock market, only to be gradually shunned… despite a geopolitical “military environment” and steadily rising order books? Fundamentally, the outlook for the European defense sector is positive, as evidenced by the following figures: National defense budgets are growing significantly—regardless of where the money comes from—and combined spending has already risen by +78.6% in real terms between 2020 and 2025. In monetary terms, annual budgets climbed from EUR 262 billion to EUR 418 billion, and by 2026 this figure is expected to reach approximately EUR 454 billion. Among other things, this suggests that earnings prospects also remain extremely favorable! So why this current “anomaly,” even though the valuation multiple has come down from a high of 30 times earnings (spring 2025) to around 18 times? This alone seems to make it clear that investors should definitely take another look at the sector!

When you buy VINCORION stock—or other stocks—you’re primarily investing in the future of 2027 and 2028, because it is precisely in those years that high military spending will begin to show up on the income statements of the relevant companies! The expected profit growth is reportedly around +20%—a figure that ranks among the most exceptional in the market! However, there was also a warning from the European Court of Auditors: there is allegedly a risk of fragmentation among industry players as well as insufficient industrial capacity. In this regard, VINCORION has also indicated that its workforce will need to be significantly expanded in order to handle the high order volume in a timely manner. So patience is required.

And the market has definitely become much more selective for individual sector stocks. There is an increasing focus on evaluating which systems can deliver the corresponding earnings potential. Conventional systems may face greater challenges than companies offering more cost-effective drones, robotics, AI, and comprehensive packages. Rheinmetall’s stock clearly illustrates this shift in perception. U.S. analysts also see a lot of potential in stocks like Leonardo, CSG, Babcock, Renk, and VINCORION. The Q3 2026 results point the way! The price target is EUR 24!

VINCORION is listed on the XETRA in Frankfurt under the symbol V1NC; the security number is 154,528,992, and the last price was approximately EUR 18.78.