Rheinmetall Faces a Market That Wants More Than Shells and Tanks
Published on 07/17/2026 at 03:30 | Redaktion boerse-global.de
Rheinmetall’s investors are being asked to weigh two very different stories at once: a growing order book and a tightening debate over whether the company’s core ammunition business can still justify its long-term ambitions. Bank of America added fresh pressure to that discussion by cutting its price target for the Düsseldorf-based defence group from 1.770 to 1.300 Euro, while keeping its buy rating in place.
Analyst Benjamin Heelan’s main objection is not to Rheinmetall’s current demand, but to its endgame. The group is targeting sales of 14 to 16 billion Euro from munitions by 2030, with a 30 percent margin, yet BofA is modelling only 10 billion Euro and 24 percent. At group level, Rheinmetall has set its sights on 50 billion Euro in revenue by 2030; BofA sees 35 billion. Heelan argues that NATO priorities are shifting toward drones and precision weapons rather than conventional artillery.
The stock’s recent performance shows how much confidence has already faded. On Thursday, the shares closed at 960,20 Euro, down 0,74 percent on the day, and they have lost 40,19 percent since the start of the year. The 1.000 Euro threshold has not been regained, while the 52-week low of 902,50 Euro, reached in late June, is still within striking distance. In September 2025, by contrast, the share price hit an all-time high of 1.995 Euro.
That weak share performance comes despite a hefty backlog. Rheinmetall reported an order book of 73 billion Euro at the end of the first quarter of 2026, and management has been pushing ahead with capacity expansion at sites including UnterlĂĽĂź, Expal and Hungary. The trade-off is visible in the cash flow: free cash flow turned negative in the first quarter because of those investments. The company also expects second-quarter revenue growth of more than 60 percent, helped by initial deliveries from the new UnterlĂĽĂź plant.
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At the same time, the group is trying to broaden its profile beyond classic munitions and weapon systems. One pillar is InterRoC VII, the Bundeswehr project for autonomous military convoys, which is being handled by Rheinmetall MAN Military Vehicles. The vehicles are being tested and trained in the UK. Rheinmetall has also been expanding into robotics and software logistics, a move intended to reduce dependence on large-calibre ammunition and support long-term margins.
There are other moving parts as well. On 16 July, Rheinmetall signed a memorandum of understanding with Space Norway for maritime surveillance of the Arctic and the North Atlantic using C-band and X-band SAR satellites, with SPOCK-1 as Rheinmetall’s contribution. The company did not give any revenue figure for the project. Separately, it plans a hybrid factory in Neuss that would combine satellite production, components for kamikaze drones and cabins for armoured trucks. Chief executive Armin Papperger has set a sales target of 2 billion Euro for the site and said it would host Germany’s largest satellite manufacturing operation.
The marine business brought both good and bad news. Defence minister Boris Pistorius ended the F126 frigate project at the end of June after costs climbed from 10 to more than 18 billion Euro. The Dutch shipbuilder Damen is now threatening a billion-euro lawsuit, while its lawyer Peter Gauweiler has called the cancellation arbitrary and unsupported by law, demanding access to the files. Pistorius rejects the criticism and blames the shipyard’s poor performance. As a replacement, eight MEKO-A-200-DEU frigates from TKMS are to be procured. For Rheinmetall, the shutdown cuts revenue by as much as 300 million Euro this year, although the contribution to the 2030 target should remain below three percent. On 16 July, TKMS also awarded Saab an 800-million-Euro contract for combat systems and radars for the successor frigate F128, a deal in which Rheinmetall is not involved.
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Even the company’s share count has changed. After the issue of new subscription shares on 15 July, the total number of voting rights now stands at 46.789.567. Rheinmetall published the notification under Section 41 of the German Securities Trading Act, WpHG.
The next checkpoint is already set. Rheinmetall is due to publish its quarterly figures on 6 August 2026, and investors will be looking for evidence that the group can turn its record backlog and factory investment into stronger operating momentum. The operating margin in the first quarter was 11,6 percent, well below the full-year target of 19 percent.
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