DB starts TKMS with 'hold', says submarine-led growth already priced in

** Deutsche Bank starts German warship builder TKMS TTKMS with "hold", saying the valuation of the stock already reflects an upside from submarine-led growth

** The broker says TKMS is a defence firm with strong exposure to the conventional submarine market and impressive cash generation

** Structural margin improvements offer a path to profitability turnaround, DB says but sees limited near-term upside at current valuation

** It says TKMS' order backlog surged 60% YoY to EUR 18.6 bln from 2024, an equivalent to around 9 years of revenue, providing solid visibility, especially in submarines

** The company is well-positioned to secure major new contracts in the next 1–2 years, which could potentially double the backlog from current levels, DB says

** TKMS spun off from Thyssenkrupp TKA and had stock market debut on October 20