Rheinmetall's Bavarian Powder Plant Takes Shape as Naval Ambitions Fade
Published on 07/24/2026 at 18:21 | Redaktion boerse-global.de
The ceremonial spade has gone into the ground in Aschau am Inn, where Rheinmetall officially launched construction of a new propellant powder factory on July 23. The Bavarian site alone is receiving €350 million of investment, with the broader corporate program — dubbed "Firepower" — commanding a total of €650 million. The expansion will lift annual powder capacity from 1,700 tonnes to 4,200 tonnes by 2028, alongside the production of more than five million formed parts and over one million propellant charge modules per year. The workforce at Aschau is set to grow from more than 800 to roughly 1,400 employees, while the site's footprint expands from 90 to 110 hectares.
The project forms part of a group-wide target to reach 20,000 tonnes of annual powder capacity by 2030, with the Bavarian facility accounting for a double-digit percentage of that ambition. The timing reflects the sustained demand for artillery munitions that has become the backbone of Rheinmetall's growth story. For the current financial year, management has guided for group-wide revenue growth of between 40 and 45 percent.
Yet the share price tells a more complicated tale. Rheinmetall stock has clawed its way back above the psychologically important €1,000 mark, trading at €1,034.40, and has gained 9.32 percent over the past 30 days. That recovery, however, still leaves the shares 48.46 percent below the 52-week high of €2,007.00 set in October last year. Year-to-date, the Düsseldorf-based defence group remains down by more than a third. The relative strength index of 47.5 suggests neither overbought nor oversold conditions, while annualised 30-day volatility of 67.42 percent points to continued large price swings.
The contrast between the powder plant's momentum and the stock's broader weakness is echoed in another corner of the business. Rheinmetall has been casting doubt on its planned acquisition of German Naval Yards Kiel, with chief executive Armin Papperger stressing that the offer remains non-binding. A decision is expected within four to five weeks, according to Manager Magazin. The hesitation stems from Defence Minister Boris Pistorius's suspension of the F-126 frigate programme in June — without that flagship project, the Kiel shipyard loses much of its strategic appeal for Rheinmetall. The episode has served as a reminder to investors that not all of the group's growth vectors are firing equally: while the land systems and munitions divisions are booming, the maritime business remains hostage to political procurement decisions.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The picture is further complicated by a note from Bank of America, which on July 21 cut its price target for Rheinmetall shares. The bank flagged potential risks around the weighting between the established munitions business and newer systems such as drones and precision weaponry, suggesting that the market is scrutinising the group's diversification beyond its core powder and ammunition franchise.
Meanwhile, the order pipeline remains robust. The British Army awarded Rheinmetall a roughly €1 billion contract to digitise combat training. The Bundeswehr, under the "Digitalisierung Landbasierte Operationen" programme, called off hardware components and integration services worth €100 million, including 5,000 adapter plates and 11,000 pin pads. In the autonomous systems space, the Federal Office for Equipment, Information Technology and In-Service Support of the Bundeswehr handed Rheinmetall overall responsibility for the "InterRoC VII" research project on autonomous military convoys. The group also completed the first delivery of 155mm artillery ammunition from its new plant in Unterlüß to Ukraine, in a low five-figure quantity, and signed a cooperation agreement with Space Norway for maritime space surveillance solutions.
On the competitive front, Thyssenkrupp Marine Systems has withdrawn its offer for German Naval Yards Kiel after failing to agree on economic terms, leaving the shipyard's ownership unresolved and Rheinmetall's own bid in limbo.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
The next major catalyst for the stock arrives on August 6, when Rheinmetall publishes its second-quarter financial results. The numbers will reveal how much of the recent flurry of contract wins has already flowed through to the bottom line. Until then, the shares look set to oscillate between the tangible progress at Aschau and the unresolved questions hanging over the naval division. The group will also present to institutional investors at the Berenberg Stockholm Seminar in early September.
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