Rheinmetall Bets Big on Defense with Record Orders and a Portfolio Cleanse, But the Market Won’t Play Along
Published on 06/17/2026 at 13:41 | Redaktion boerse-global.de
Rheinmetall is cutting ties with its past in a decisive push to become a pure-play defense contractor. The Düsseldorf group has agreed to sell its struggling automotive division to the investment firm Aequita for roughly €350 million, freeing up capital and management bandwidth at a time when military demand is surging. The move marks a strategic turning point: the legacy auto-supplier business had been squeezed by the industry’s shift to electrification, and its departure leaves the company entirely focused on armaments.
That focus is already paying off in sheer order volume. At the Eurosatory trade fair in Paris, Rheinmetall announced a €5.7 billion contract from Romania covering nearly 300 Lynx infantry fighting vehicles, plus air-defense systems, ammunition and four naval vessels. Deliveries are scheduled between 2028 and 2030, with partial financing from the EU’s SAFE program. The deal cements the group’s role in equipping NATO’s eastern flank — a strategic priority that keeps the pipeline full for years.
Another multibillion-euro project may be taking shape in Spain. According to Spanish daily Cinco DĂas, Rheinmetall is in advanced talks to supply the chassis for a new artillery program led by Indra. The wheeled portion of the contract is valued at roughly €2.7 billion and would involve 86 self-propelled howitzers plus dozens of support vehicles, likely based on the heavy-duty HX3 truck. The two companies signed a memorandum of understanding in March 2026 and have discussed a joint venture capable of producing up to 3,000 military trucks. However, the deal is not yet official — and it faces opposition. General Dynamics’ Spanish subsidiary Santa Bárbara has already filed legal challenges against the financing, and further lawsuits could delay or derail the award.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Despite the flurry of orders, Rheinmetall’s share price has gone in the opposite direction. The stock closed at €1,147.80 on Tuesday, down more than 28% since the start of the year and dangerously close to its 52-week low. The gap to the 200-day moving average of €1,596.16 stands at about 28%, underscoring a deeply entrenched downtrend. Investors are shrugging off the record backlog of €73 billion — with vehicle systems alone accounting for €26 billion — and instead focusing on peace-talk speculation around Ukraine and fears that demand may peak sooner than expected. The stock remains some 42% below the all-time high hit last September.
On the technological front, Rheinmetall is pushing ahead with new weaponry. Through the joint venture Destinus Strike Systems, it is accelerating production of cruise missiles, with a particular emphasis on the “Ruta Block 3” variant, which has a range exceeding 2,000 kilometers. Assembly of smaller versions has already begun at a dedicated final assembly line in Germany, and the first systems are slated for delivery to customers later this year.
The Spanish contract, if it materialises, would fit neatly into this growth narrative. But the legal sniping from Santa Bárbara means Rheinmetall cannot count on those euros just yet. Until a binding contract is signed, the uncertainty will linger — and the market, already skittish, is unlikely to give the company the benefit of the doubt.
Analysts still see value in the fundamentals. Consensus estimates put 2026 earnings per share at €38.09, and management has reaffirmed its guidance for an operating margin of around 19%. Investors will get a clearer picture on August 6, when the second-quarter results are released. For now, the paradox of a company with a bulging order book and a slumping share price remains unresolved.
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