Rheinmetall’s €73 Billion Backlog Can’t Mask a Stock That’s Still Down a Third This Year
Published on 07/25/2026 at 20:41 | Redaktion boerse-global.de
Rheinmetall’s share price clawed back 1.29 percent on Friday to close at €1,032.60, extending a seven-session rally that has now pushed the stock 5.34 percent higher. Over the past 30 days, the gain stands at 9.13 percent. Yet for all the recent breathing room, the Düsseldorf-based defence contractor remains 48.55 percent below its 52-week peak of €2,007.00, struck on October 3 last year. Since January 1, the equity has shed 33.49 percent of its value — a brutal disconnect from an operating story that, by almost any measure, is firing on all cylinders.
The chasm between operational momentum and market performance is best captured by a single number: €73 billion. That was Rheinmetall’s order backlog at the end of the first quarter of 2026, up from €63.8 billion at the close of 2025. First-quarter revenue rose 8 percent to €1.9 billion, while operating profit jumped 17 percent to €224 million. In an environment where traditional catalysts such as interest-rate decisions and macro data have lost their grip on investor attention, that backlog is becoming the defining trust metric — a trend visible across the industrial landscape. Siemens Energy, for instance, reported a €154 billion order book in May, while Austrian aerospace supplier FACC sits on a cushion of more than $6 billion.
A €500 Million Powder Bet in Bavaria
Rheinmetall is not resting on its order pile. On Thursday, the group broke ground on a new propellant plant in Aschau am Inn, Bavaria, dubbed “Firepower.” The investment: roughly €500 million. By 2028, the facility is expected to churn out more than one million propellant charge modules per year, a direct response to the insatiable demand for artillery ammunition from both European armed forces and Ukraine. The urgency is underscored by a delivery on July 14, when Rheinmetall shipped a low-five-figure batch of 155-mm artillery shells from its Unterlüß plant in Lower Saxony to Kyiv — evidence that existing capacity is already stretched to the limit.
The pipeline of new business extends well beyond artillery. Rheinmetall secured a roughly €1 billion share of the “Omnia Training” consortium with Raytheon UK to digitise the British Army’s combat training over a 15-year period. It signed a letter of intent with Norway’s Space Norway for maritime space surveillance in the Arctic, channelled through the joint venture Rheinmetall ICEYE Space Solutions. On behalf of the German federal procurement office, it took overall responsibility for the autonomous convoy research project “InterRoC VII.” A new international customer ordered four Skynex air-defence systems, complete with carrier vehicles and ammunition, for several hundred million euros. And with Lockheed Martin, Rheinmetall agreed to establish a centre of excellence for the co-production of ATACMS guided missiles in Germany.
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Skynex Under Fire, Executives Under Guard
Not all the headlines are favourable. A Ukrainian battlefield report from April 1 has cast a shadow over the Skynex system, describing it as “extremely unreliable” during a Russian drone attack, citing jamming, target-tracking issues and hydraulic problems. Rheinmetall has pushed back, insisting the system is fundamentally effective and suggesting operator error may be to blame. The controversy has not deterred customers: the recent four-system order, with delivery scheduled within 39 months, suggests confidence in the product remains intact.
A more existential risk is the security environment surrounding Rheinmetall’s leadership. Germany’s Federal Office for the Protection of the Constitution has warned of Russian espionage and potential attacks on executives in the defence industry. CEO Armin Papperger has been under police protection since 2022; in 2024, there were specific indications of a planned assassination attempt. The intelligence agency describes a Russian modus operandi involving low-level agents and phishing campaigns. Against this backdrop, the European Union’s €150 billion SAFE defence fund — a credit facility for member states — offers a structural tailwind for European defence procurement that should underpin demand for years.
Analyst Caution and a Naval Setback
The market’s response to all this activity has been mixed. On Monday, Bank of America analyst Benjamin Heelan cut his price target for Rheinmetall from €1,770 to €1,300, while maintaining a “Buy” rating. His reasoning: a technological shift toward drones and precision weapons that could, over time, pressure the conventional munitions and vehicle divisions. The stock’s recent recovery suggests the market has at least partially digested that reassessment, though the 7.56 percent discount to the 50-day moving average of €1,117.09 still signals caution.
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Adding to the headwinds, the cancellation of the F126 frigate programme forced Rheinmetall to issue an ad-hoc statement in early July, flagging a potential revenue hit of up to €300 million for the 2026 financial year. That sum is modest relative to the billions in new orders flooding in, but it is a reminder that even a company with a €73 billion backlog is not immune to programme risk. How the interplay between order inflows and programme losses nets out will become clearer on August 6, when Rheinmetall reports second-quarter results. The consensus is looking for earnings per share of $1.39 on revenue of roughly $3.57 billion.
Until then, investors are left to navigate a stock with a 30-day annualised volatility of 67.40 percent — a paper for the risk-tolerant, caught between an operating story that keeps getting stronger and a share price that keeps getting cheaper.
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