Rheinmetall’s Mixed Signals: A Truck Order and a Budget Squeeze
Published on 07/28/2026 at 13:02 | Redaktion boerse-global.de
Rheinmetall shares climbed 3.34% to €1,095.20 on Tuesday, extending a recovery that has seen the stock gain 12.62% over the past month. The move comes despite a Bloomberg report that the German government plans to slash its ammunition budget to around €9.6 billion in 2027, down from €11 billion this year — a headline that might have been expected to weigh on the defence group.
The proposed cuts, with €7.7 billion coming from the core budget and €1.9 billion from a special fund, are part of a broader shift in Germany’s defence priorities. The overall defence budget is set to rise to €109.7 billion by 2027 and continue growing through 2030, but spending is increasingly pivoting from artillery and munitions toward drones, air defence and IT systems — areas where Rheinmetall has a smaller footprint than in its traditional ammunition business.
A Bundeswehr Order Offers Near-Term Support
Against that backdrop, the Bundeswehr has placed a fresh order for 56 Elefant 2 heavy-duty transporters worth approximately €60.5 million, with deliveries scheduled for 2026 and 2027. The deal extends a framework contract originally signed in 2018 for up to 137 vehicles, and reflects rising demand that has pushed the military to stretch the agreement beyond its initial seven-year term.
The order is the latest in a steady stream of Bundeswehr contracts that have kept Rheinmetall’s production lines busy. But for investors, the real focus is on the company’s second-quarter results due on August 6. In the first quarter, Rheinmetall posted earnings per share of €2.42 on revenue of €1.94 billion, up from €1.92 a year earlier.
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Analysts Divided on Growth Trajectory
The analyst community remains broadly constructive, with 23 buy ratings, four holds and no sells, according to data cited by Die Presse. However, several houses have trimmed their price targets in recent weeks. Deutsche Bank cut its target from €2,100 to €1,800 while maintaining a “Buy” rating, arguing that the August numbers should confirm an acceleration in growth. Berenberg lowered its target to €1,600 from €1,750, also keeping a “Buy” call, while Bernstein held its target at €1,900 with an “Outperform” rating.
The Deutsche Bank analyst described the recent share price weakness as overdone, calling it an attractive entry point. But the stock remains 45.43% below its October 2025 record high of €2,007, and market observers note that the long-term downtrend from that peak is still intact.
Beyond the Budget: Skyranger, Shipyards and China
While the ammunition budget debate has grabbed headlines, Rheinmetall is making progress in other areas. The Skyranger air defence system, manufactured in Zurich-Oerlikon, is gaining international traction. Switzerland plans to spend around $992 million on 32 systems from 2028, Austria has ordered 36 Skyranger 30 units for its Pandur EVO armoured vehicles, Germany has ordered 19, and additional contracts have come from the Netherlands and Romania. Production capacity is set to expand from 70-100 turrets per year to 400, with around 50 new workers being hired monthly.
In the naval sector, TKMS has abandoned its interest in acquiring German Naval Yards Kiel, leaving Rheinmetall as the sole remaining bidder for the shipyard. That development comes after the defence ministry’s decision to halt the multibillion-euro F126 frigate project, which had been seen as a setback for Rheinmetall’s maritime ambitions.
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China’s Export Controls Add a New Layer
Adding to the complexity, China has placed Rheinmetall on an export control list for dual-use goods, covering rare earths, sensors and microelectronics. The move underscores Western defence supply chains’ dependence on Chinese inputs, though the company has not yet quantified any concrete operational impact.
The August Test
With the stock still trading nearly 5% below its 50-day moving average of €1,114.76, the coming weeks will test whether the recovery has legs. The Bundeswehr truck order is a positive signal for operational momentum, but the bigger questions — whether Germany’s shifting defence priorities will crimp Rheinmetall’s medium-term growth, and whether the company can offset that with gains in air defence, naval and other segments — will only begin to be answered when the second-quarter numbers land on August 6.
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