Rheinmetall Chases Cruise Missiles and Drone Dollars While the Stock Sits 36% Lower for the Year
Published on 09/28/2026 at 05:50 | Editorial boerse-global.de
Rheinmetall is pushing well past its traditional land-systems business, stacking up service contracts and missile ambitions even as its share price continues to lag. The Düsseldorf-based defense group closed Friday at €986.60, down 0.9% on the day — a level that leaves the stock nursing a 36% loss since the start of the year.
The latest addition to the order book came midweek, when the company confirmed a multi-year framework agreement with Germany's General Customs Directorate covering maintenance, repair and emergency support for four new LNG-powered customs vessels. It is a modest piece of business in revenue terms, but it signals a deliberate move to build out service offerings that sit apart from pure weapons manufacturing.
That same logic is playing out at sea in other ways. Rheinmetall recently put networked unmanned systems through their paces during a NATO exercise in Portugal, positioning itself for a Western demand cycle focused on monitoring critical maritime infrastructure.
Missile Gap Opens a New Front
Far more consequential is the company's looming entry into cruise missile production. In an interview with Euronews on September 17, chief executive Armin Papperger described Germany's missile stockpiles as alarmingly thin — a shortfall Rheinmetall intends to help close. Papperger also said two strategic joint ventures are in the final stretch before signing.
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The cruise missile push fits a broader effort to plug strategic holes in Europe's defense architecture. Beyond guided weapons, Rheinmetall is also exploring less conventional territory, including humanoid robotics and space technologies. On the tactical vehicle side, the group is working with Mercedes-Benz UK to supply new mobility platforms to the British armed forces.
Artillery and Drone Orders Keep the Backlog Full
Conventional ammunition remains the engine of the business. Roughly two weeks ago, Rheinmetall booked an order from an international customer for a five-digit quantity of 155mm artillery shells, with a value in the low triple-digit millions of euros and delivery scheduled for 2027. That steady drumbeat of shell demand gives management visibility while newer weapons categories are being stood up.
Drones are the other growth story. Stark Defence, according to media reports, will soon begin first deliveries of combat drones to the Bundeswehr. The initial tranche carries a value of €275 million as part of an overall agreement worth €2.9 billion. Rheinmetall is named in those reports as a supplier on a billion-euro contract, though its precise financial share of the drone program has not been disclosed.
Analysts Split on What Comes Next
The capital markets have begun adjusting their views. MWB Research upgraded the stock from "Sell" to "Hold" on September 21. Berenberg went the other way in emphasis, keeping its "Buy" rating and €1,600 price target unchanged on Friday. Analyst Chris Armstrong pointed to positive economic signals stemming from fiscal policy stimulus and rising exports. Berenberg grouped Rheinmetall alongside RENK and OHB as its preferred picks in aerospace, space and defense.
For investors, the open question is how quickly announced partnerships convert into binding contracts — and whether the new business lines can contribute meaningfully to profitability in the medium term.
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