Rheinmetall’s Frigate Setback Creates a Quarter-Sized Hole as CEO Fuels a Share Comeback
Published on 07/06/2026 at 16:13 | Redaktion boerse-global.de
Rheinmetall’s shares staged a notable recovery on Monday, climbing 1.64 percent to €1,115.00, extending a weekly gain of 14.65 percent that has lifted the stock well clear of its 52-week low of €902.50 touched on 25 June 2026. Yet the path back to stability remains riddled with question marks, as the cancellation of Germany’s F126 frigate programme casts a long shadow over second-quarter performance.
The defence group’s management now expects order intake in the three months to June to land in the low double-digit billion-euro range, a far cry from the previously targeted €20 billion-plus. The shortfall stems directly from Berlin’s decision to scrap the F126 contract, a move that also torpedoed Rheinmetall’s recent acquisition of shipbuilder NVL, which was tailored precisely to win that work. The company is assessing whether the cancellation will spill over into the full-year figures, with a potential revenue hit of up to €300 million in 2026 if no countermeasures are taken.
Despite the headwind, Chief Executive Armin Papperger is sending clear signals of confidence. He bought more than €3 million worth of the company’s shares at the end of June, a move analysts see as a bet on the underlying business. The group’s order backlog hit a record €73 billion in March, up 32 percent year-on-year—and crucially, the cancelled frigate programme was never booked into that pile, suggesting the market may have overreacted initially.
Technical indicators point to a market still weighing the balance. The 50-day moving average sits at €1,192.56, about 6.5 percent above Monday’s close. A sustained move above that level would be considered a bullish signal. But the relative strength index of 48.7 is neutral, offering room to move in either direction. Annualised 30-day volatility remains elevated at 69.33 percent, underscoring the potential for violent swings.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Papperger used the lull to launch a broadside at the previous German government, accusing former Chancellor Angela Merkel of deliberately weakening the domestic defence industry by telling it that Germany would rely on the US instead. That policy, he argued, kept the sector small for years. Rheinmetall has since expanded massively—artillery shell production has rocketed from 70,000 to 1 million units annually—and Papperger now wants binding contracts and faster procurement to lock in returns.
Political support is coming from the current administration. Finance Minister Lars Klingbeil defended higher new borrowing for 2027, and the defence budget is set to rise stepwise to €179.9 billion by 2030. For 2027 alone, the defence ministry will have €105.8 billion at its disposal, plus roughly €27.5 billion from the Bundeswehr special fund. Germany’s total defence spending in 2026 is pegged at €108 billion, while the EU’s “Rearm Europe” programme carries an €800 billion price tag and Nato is pushing member targets toward 3.5–5 percent of GDP.
One potential near-term offset to the F126 loss is the prospective €3.1 billion Belgian order for air-defence systems. Brussels is reportedly planning to buy 20 Skyranger short-range systems from Rheinmetall. The deal still needs approval from the Belgian council of ministers and could be announced at the Nato summit in Ankara on 7–8 July. If it materialises, it would give the group a solid counterweight to the frigate debacle.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
Yet the stock’s longer-term performance tells a sobering story. At Monday’s close, Rheinmetall still trades 44.11 percent below its 52-week high of €1,995.00 set in September 2025. Year-to-date, the shares remain 31.50 percent in the red. Market sentiment towards European defence names has been dented further by the withdrawal of KNDS's planned initial public offering, which has cast a pall over the sector.
For the current week, the key test will be whether Rheinmetall can consolidate its recent rebound and push toward the 50-day moving average. Failure to do so could trigger a slide back toward the €900 zone, from which the stock has already climbed 23.55 percent. The company’s half-year report, expected in the third quarter of 2026, will be the ultimate litmus test of whether the core business can fully compensate for the lost frigate programme. In the meantime, all eyes are on Ankara.
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Rheinmetall Stock: New Analysis - 6 July
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