Original-Research: Schaeffler AG (von Quirin Privatbank Kapitalmarktgeschäft): BUY

Classification of Quirin Privatbank Kapitalmarktgeschäft to Schaeffler AG

Company Name:	Schaeffler AG
ISIN:	DE000SHA0100
Reason for the research:	Update
Recommendation:	BUY
from:	11.05.2026
Target price:	9.80
Last rating change:
Analyst:	Daniel Kukalj, CIIA, CEFA

Solid start to the year confirms 2028 story – E-Mobility holds the key

Schaeffler entered fiscal year 2026 on a constructive note despite a fragile macro environment: revenue came in at EUR 5.8bn, 1.0% above prior year on a constant-currency basis, and the EBIT margin before special items improved to 5.0% (prior year 4.7%). The management confirmed full-year guidance. More important than the pure Q1 beat optics is that the operational drivers for the 2028 mid-term targets (doubling EBIT before special items, group margin 6-8%, revenue EUR 27-29bn) are visibly gaining traction, particularly in the E-Mobility division, which has to shoulder roughly 80% of the EBIT catch-up to 2028. We confirm our BUY rating with a higher PT of EUR 9.80 (8.70) based on our ROE/COE valuation approach.

Key take-aways from the Q1 results:

• Group margin expansion despite volume pressure is the positive surprise. Q1 is seasonally margin-weak, thus a 5.0% margin in the opening quarter already overshadows the midpoint of the 2026 range (3.5-5.5%) within the first three months.
• E-Mobility: Revenue EUR 1,210m (+6.0% fx-adjusted), EBIT before special items EUR -215m (prior year EUR -269m), margin -17.8% after -23.1%. That is a YoY margin improvement of 5.3 percentage points driven by volume ramp-ups in Europe and Asia/Pacific as well as improved plant performance. Versus FY 2025 (-16.0%) the Q1 margin still lags slightly, but the margin path in this division is historically H2-loaded (scaling with volume). Implication for 2028: The division has to move from -16% to breakeven by 2028 that is ~16 points in three years, i.e. ~5pp/year. Q1 2026 shows exactly this pace. That is the most important signal of the quarter.
• Powertrain & Chassis: Revenue EUR 2,141m (-1.8% fx-adjusted, including portfolio streamlining), EBIT before special items EUR 246m, margin 11.5% (prior year 12.7%). Despite the expected ICE volume decline and active portfolio trimming, PTC remains double-digit profitable. The FY 2025 margin was 10.5%, thus Q1 shows that the upper half of the 2028 corridor (10-12%) can realistically be defended.
• Vehicle Lifetime Solutions: Revenue EUR 801m (+0.9% fx-adjusted), EBIT before special items EUR 128m, margin 15.9% (prior year 15.5%). VLS is therefore already above the upper end of the 2028 corridor (13.5-15.5%). The task here is not catch-up but margin defense alongside moderate growth.
• Bearings & Industrial Solutions: Revenue EUR 1,573m (+1.6% fx-adjusted) with Greater China as the growth driver. EBIT margin 9.0% after 10.0% sits at the lower end of the 2028 corridor (9-11%). The company describes Q1 as on plan following the implementation of structural measures. Margin development over the rest of the year will be the key data point.

The path to 2028 targets – Our reality check

~80% of the EBIT doubling has to come from E-Mobility. That is the decisive point of the equity story and at the same time the biggest risk. The positive read from Q1 2026 results:

• Margin path on track: from -23.1% to -17.8% YoY = 5.3pp. At this pace, the division lands between -2% and breakeven in 2028 i.e. within the target corridor.
• Top-line growth is coming through: +6.0% fx-adjusted in Q1 despite a weak market.
• Total order book secures visibility: ~EUR 15.5bn order intake in 2025; ramp-ups are contracted.

For the group, the following also needs to materialize:

• Top-line recovery: EUR 23.5bn vs sales target of EUR 27-29bn. That is +15 to 23% over three years. Without a cyclical market recovery (particularly European auto and China industrial), the lower end of the corridor will be the realistic landing zone.
• The 2028 story remains intact, with clearly identifiable milestones per division. Three divisions (PTC, VLS, B&IS) are already delivering at or near the target corridors. The decisive lever E-Mobility shows in the first quarter exactly the pace of margin improvement that the 2028 plan assumes. As long as this trajectory holds over the next 6-8 quarters, the goal of doubling EBIT is operationally achievable.

You can download the research here: SCHAEFFLER_AG_20260511
For additional information visit our website: https://research.quirinprivatbank.de/

Contact for questions:
Quirin Privatbank AG
Institutionelles Research
Schillerstraße 20
60313 Frankfurt am Main
research@quirinprivatbank.de
https://research.quirinprivatbank.de/