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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on KBX

Knorr-Bremse's recent performance was driven by a double-digit share price rise, with investors potentially undervaluing the company by 30%. The company's decision to increase its periodic dividend to €1.75, a 10% increase, is a positive development, indicating a commitment to returning value to shareholders. Additionally, the stock is estimated to be trading below its intrinsic value, offering an opportunity for investors to capitalize on market inefficiencies.

1.c. Company Highlights

2. Knorr-Bremse's Q3 2025 Earnings: Strong Performance and Strategic Progress

Knorr-Bremse reported a strong third quarter in 2025, with revenues of €1.9 billion, up 3% year-over-year, and an operating EBIT margin of 13.3%, the best in 16 quarters. The company's earnings per share (EPS) came in at €0.89, slightly below analyst estimates of €0.971. The Railway Systems (RVS) division achieved an operating EBIT margin of 17.0%, while the Commercial Vehicle Systems (CVS) division reported a margin of 10.5%. The company's strong financial performance was driven by its diversified revenue generation, cost control, and financial flexibility.

Publication Date: Nov -10

📋 Highlights
  • Strong Q3 Financial Performance:: Knorr-Bremse reported €1.9B in revenues (+3% YoY) and a 13.3% operating EBIT margin, a 100 bps improvement and the highest in 16 quarters.
  • RVS Division Growth:: Railway Systems achieved €1.05B in revenues (+6% YoY) and a 17.0% operating EBIT margin, driven by 6% organic growth and BOOST implementation.
  • CVS Margin Expansion:: Commercial Vehicle Systems improved its EBIT margin to 10.5% (+50 bps) despite a 9% revenue decline due to divestments and FX impacts.
  • Strategic Acquisitions:: Duagon acquisition targets €175M revenue and 16% margin by 2026, while Travis Road Services expands the "chain of pearls" strategy to 12 of 14 buckets.
  • Cost & Workforce Adjustments:: 15% workforce reduction in North America and a 10.5% R&D cost target (6-7% of revenue) aim to enhance profitability and flexibility.

Segment Performance

The RVS division posted a strong organic growth and increased profitability quarter-over-quarter, driven by the implementation of BOOST. The division achieved an order intake of nearly €1.2 billion, a 6% organic growth, and revenues of €1.05 billion, up almost 6% year-over-year. The CVS division managed a slight margin expansion despite a challenging North American truck market, with an order intake of €783 million, a 4% organic growth, and revenues of €833 million.

Strategic Progress

Knorr-Bremse made significant strategic progress in Q3 2025, including the acquisition of duagon, a Swiss-based supplier of electronics and software solutions for safety-related applications in rail. The company also acquired Travis Road Services, which is expected to expand its services into a new area and provide access to future profit sources. The company's "chain of pearls" strategy is aimed at expanding its services and aftermarket presence, with a focus on brand independence and a multi-brand approach.

Outlook and Valuation

Knorr-Bremse confirmed its operating guidance for 2025, with a revenue growth and an operating EBIT margin of 10% to 10.5%. The company is targeting an EBIT margin of 14% or higher for 2026. Based on the current stock price, the company's P/E Ratio is 31.06, P/B Ratio is 4.55, and EV/EBITDA is 11.64. With a dividend yield of 2.15% and a free cash flow yield of 6.65%, the stock appears to be reasonably valued. Analysts estimate revenue growth of 5.6% for next year, which is in line with the company's growth prospects.

Operational Efficiency

Knorr-Bremse has been focusing on operational efficiency, with a reduction in workforce in North America by 15% and a focus on lowering the fixed cost base in the CVS division. The company has also started an AI campaign to automate repetitive work, which is expected to improve productivity. The RVS division has achieved a 17% margin in Q3 and is expected to maintain a similar margin in Q4, with a strategic target of 19% in the midterm.

3. NewsRoom

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Discover 3 European Stocks Believed To Be Trading Below Intrinsic Value

Oct -02

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Should You Investigate Knorr-Bremse AG (ETR:KBX) At €86.10?

Sep -16

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Global Market's 3 Value Stock Picks For Estimated Growth

Aug -25

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Knorr-Bremse AG's (ETR:KBX) Stock Has Shown A Decent Performance: Have Financials A Role To Play?

Aug -22

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Analyst Estimates: Here's What Brokers Think Of Knorr-Bremse AG (ETR:KBX) After Its Second-Quarter Report

Aug -04

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Knorr-Bremse Second Quarter 2025 Earnings: EPS Misses Expectations

Aug -02

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European Value Stocks That Could Be Trading Below Their Estimated Worth In July 2025

Jul -24

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Knorr-Bremse AG's (ETR:KBX) Intrinsic Value Is Potentially 27% Above Its Share Price

Jul -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.99%)

6. Segments

Commercial Vehicle Systems

Expected Growth: 1.8%

Knorr-Bremse's Commercial Vehicle Systems growth is driven by increasing demand for heavy-duty trucks, buses, and trailers, fueled by rising global trade and e-commerce. Additionally, stringent emissions regulations and safety standards boost demand for advanced braking systems, while the company's strong OEM relationships and expanding aftermarket business also contribute to growth.

Rail Vehicle Systems

Expected Growth: 2.2%

Knorr-Bremse's Rail Vehicle Systems segment growth of 2.2% is driven by increasing demand for efficient and safe rail transportation, urbanization, and government investments in rail infrastructure. Additionally, the company's focus on innovative braking systems, electrification, and digitalization solutions also contribute to its growth.

Other Segments and Consolidation

Expected Growth: 1.5%

Knorr-Bremse's Other Segments and Consolidation growth of 1.5% is driven by increasing demand for rail services, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on digitalization, innovation, and cost optimization initiatives contribute to its growth. Furthermore, the segment benefits from a diversified customer base and a strong market position, enabling it to capitalize on growth opportunities.

7. Detailed Products

Braking Systems

Knorr-Bremse's braking systems are designed for rail and commercial vehicles, providing reliable and efficient braking solutions.

Door Systems

Knorr-Bremse's door systems provide reliable and efficient door operation for rail vehicles, ensuring safe and comfortable passenger experience.

Air Supply Systems

Knorr-Bremse's air supply systems provide reliable and efficient air compression and distribution for rail vehicles.

Control Systems

Knorr-Bremse's control systems provide advanced control and monitoring solutions for rail vehicles, ensuring safe and efficient operation.

Auxiliary Power Systems

Knorr-Bremse's auxiliary power systems provide reliable and efficient power supply for rail vehicles, ensuring continuous operation.

Aftermarket Services

Knorr-Bremse's aftermarket services provide maintenance, repair, and overhaul services for rail vehicles, ensuring optimal performance and reliability.

8. Knorr-Bremse Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

Knorr-Bremse Aktiengesellschaft operates in the automotive and rail industries, where substitutes are limited, but the company's products are highly specialized, reducing the threat of substitutes.

Bargaining Power Of Customers

Knorr-Bremse's customers are primarily large automotive and rail companies, which have limited bargaining power due to the company's specialized products and strong market position.

Bargaining Power Of Suppliers

Knorr-Bremse relies on a diverse supplier base, but some suppliers have significant bargaining power due to their size and market dominance, which could impact the company's operations.

Threat Of New Entrants

The automotive and rail industries have high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with Knorr-Bremse.

Intensity Of Rivalry

The automotive and rail industries are highly competitive, with several established players competing for market share, which increases the intensity of rivalry for Knorr-Bremse.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.73%
Debt Cost 3.96%
Equity Weight 55.27%
Equity Cost 8.64%
WACC 6.55%
Leverage 80.93%

11. Quality Control: Knorr-Bremse Aktiengesellschaft passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CIE Automotive

A-Score: 5.8/10

Value: 6.6

Growth: 5.4

Quality: 2.6

Yield: 6.2

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
HELLA

A-Score: 4.8/10

Value: 3.6

Growth: 5.7

Quality: 4.6

Yield: 2.5

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Continental

A-Score: 4.7/10

Value: 7.7

Growth: 3.3

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Knorr-Bremse

A-Score: 4.5/10

Value: 3.8

Growth: 3.4

Quality: 5.2

Yield: 3.8

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Valeo

A-Score: 4.4/10

Value: 8.3

Growth: 3.8

Quality: 2.5

Yield: 4.4

Momentum: 5.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Forvia

A-Score: 4.1/10

Value: 9.6

Growth: 3.2

Quality: 1.5

Yield: 1.2

Momentum: 8.0

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

90.85$

Current Price

90.85$

Potential

-0.00%

Expected Cash-Flows