Rheinmetall’s €60.5 Million Truck Order Offers a Glimmer, but Budget Cuts and a Fregatten Shock Loom Large
Published on 07/28/2026 at 06:41 | Redaktion boerse-global.de
Rheinmetall shares edged up 2.50 percent on Monday to close at €1,059.80, buoyed by a new Bundeswehr contract for 56 Elefant-2 heavy-duty transporters valued at roughly €60.5 million. The order, drawn from a 2018 framework agreement covering up to 137 vehicles, has been extended beyond its original seven-year term due to surging demand, with deliveries slated for 2026 and 2027. Yet for investors, this piece of positive news is merely a sideshow. The real focus is on the company’s upcoming quarterly results in early August, which analysts expect to confirm a growth acceleration — or expose the cracks in a defense giant that has seen its shares tumble 31.74 percent since the start of the year.
The stock’s recent recovery has been modest. Over the past seven days, Rheinmetall has gained 5.81 percent, and it is up 8.98 percent over the last month. That still leaves it nearly 5 percent below its 50-day moving average of €1,114.76, and a staggering 47 percent off its all-time high of €2,007 reached in October 2025. Market watchers note that the long-term downtrend from that peak remains intact, despite the recent bounce.
The deeper headwind is structural. Germany’s draft federal budget for 2027 allocates just €9.6 billion for munitions — a €1.4 billion cut from the current year’s €11 billion. According to Ukrainian media reports, €7.7 billion of that comes from the core budget and €1.9 billion from a special fund. The overall defense budget for 2027 is set at €109.7 billion. While the defense ministry insists ammunition procurement remains a priority, the reduction hits Rheinmetall, Germany’s largest munitions maker, directly. The government is shifting spending toward drones and air defense, away from traditional munitions, tanks, and artillery — a trend that has prompted analyst Jens-Peter Rieck of MBW Research to downgrade the stock to Hold, arguing that tanks and artillery are no longer at the top of procurement planners’ lists.
Should investors sell immediately? Or is it worth buying Rheinmetall?
That view is not universally shared. A broader analyst consensus compiled by DiePresse shows 23 Buy ratings against just four Holds, with no Sell recommendations. The divergence underscores the uncertainty around the company’s future order mix. Rheinmetall’s market capitalization stands at €48.13 billion — more than ten times the €4.2 billion it commanded before Russia’s invasion of Ukraine in February 2022. The recent share price decline, while painful, must be seen against that extraordinary revaluation.
Additional pressures are piling up. Germany’s cancellation of the F126 frigate program sent the stock plunging 19 percent in a single session, and Rheinmetall plans to assess the fallout on August 6. China has also imposed export restrictions on the company, potentially complicating its international supply chain. In this environment, Deutsche Bank has shifted its preference to French rival Thales, upgrading it from Hold to Buy with a €296 price target and 21.5 percent upside, citing robust revenue of €10.95 billion and a 21 percent jump in order intake to €12.47 billion. The bank also expressed broader doubts about the valuation premiums of European defense stocks over their US counterparts — a concern that weighs on Rheinmetall as well.
Analysts have been adjusting their targets accordingly. Deutsche Bank cut its price target from €2,100 to €1,800 but maintained a Buy rating, arguing that the August earnings should show a growth acceleration and that the recent weakness is overdone. Berenberg lowered its target from €1,750 to €1,600, also keeping a Buy. Bernstein held steady at €1,900 with an Outperform rating. The consensus remains broadly constructive, but near-term execution risks are rising.
On a brighter note, CEO Armin Papperger was ranked first in the F.A.S. manager ranking for the second quarter of 2026, ahead of Volkswagen’s Oliver Blume. He used the platform to call for global rules on artificial intelligence, stressing that humans still make the decisions at Rheinmetall systems. For investors, the picture is a delicate one: structural tailwinds from European rearmament clash with concrete budget cuts, canceled contracts, and geopolitical export risks that are keeping short-term sentiment on edge. The new truck order is a reminder that operational demand remains robust — but it will take more than €60.5 million to reverse the broader narrative.
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