Rheinmetall’s Space Pact and New Ammo Factory Can’t Mask a Deepening Skepticism Over Artillery’s Future
Published on 07/16/2026 at 11:33 | Redaktion boerse-global.de
Rheinmetall marked a productive Wednesday, signing a space-surveillance partnership with Norway and dispatching the first artillery shells from its brand-new plant in Unterlüß. Yet for all the operational milestones, the defence titan’s stock continues to hug levels that look more like a distress signal than a buying opportunity. The shares currently change hands at around €970, a whisker above their 52-week trough of €902.50, and have shed roughly 39% since the start of the year.
The disconnect between Rheinmetall’s deal flow and its market valuation has one clear culprit: a growing conviction among influential analysts that the company’s biggest growth engine — conventional ammunition — is running out of fuel even before it reaches full throttle. Bank of America’s Benjamin Heelan has slashed his revenue forecast for the weapons and munitions division from the €14–16 billion the group laid out on its capital markets day to approximately €10 billion by 2030. The margin assumption has also come down, from 30% to around 24%, translating into an operating profit of roughly €2.4 billion rather than the €4–5 billion Rheinmetall had pencilled in.
Heelan’s reasoning goes straight to the heart of modern warfare. Budgets across NATO are pivoting away from massed artillery and toward drones, precision-guided munitions and air-defence systems, a trend he believes will only accelerate. His concerns are echoed by MWB Research’s Rieck, who dropped his buy recommendation a week ago, and by JPMorgan’s David H. Perry, who cautioned at the start of the month that the pace of technological change in defence would upend established winners.
Those fears are not purely theoretical. Late June saw the Bundeswehr scrap the F126 frigate programme, a project that Rheinmetall had considered a crown jewel — one that justified the expensive acquisition of naval shipbuilder Naval Vessels Lürssen. The loss of that contract punches a hole in the company’s marine forecasts and adds another layer of doubt about its medium-term growth trajectory.
Should investors sell immediately? Or is it worth buying Rheinmetall?
None of this means Rheinmetall has stopped delivering. The new MoU with Norway’s Space Norway aims to fuse X-band radar data from Rheinmetall ICEYE Space Solutions with C-band wide-area surveillance to monitor the Arctic and North Atlantic, building on the bilateral Hansa agreement struck in February 2026. The X-band satellites themselves are being assembled at the company’s Neuss site.
On the munitions front, the “Werk Niedersachsen” in Unterlüß has shipped its first batch of 155-mm RH1412 shells to Ukraine — a low five-figure order — just under a year after the plant officially opened on 27 August 2025. The group still targets a global annual artillery capacity of 1.5 million rounds by 2030, a figure that assumes demand from both NATO and Ukraine remains robust.
But the market is not buying that assumption right now. The stock’s technicals paint a stark picture: it trades about 14% below its 50-day moving average of €1,135 and a staggering 35% below the 200-day line of €1,502. The relative-strength index of 36.7 is flirting with oversold territory, while 30-day annualised volatility sits at an elevated 69%.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
Bank of America maintains a buy rating despite the cuts, though its price target has tumbled from €1,770 to €1,300. That still implies upside of roughly a third from current levels, but the record high of €1,995 set in September 2025 now looks a distant memory.
Investors will get the next piece of the puzzle on 6 August, when Rheinmetall reports second-quarter results. The focus will be on divisional margins and whether management adjusts its full-year guidance. A €73 billion order backlog provides a solid foundation, but until the artillery sceptics are proved wrong — or right — the share price seems trapped in the shadow of a structural rethink in how wars are fought.
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