Rheinmetall Pushes Into Asia and Sets AI Red Lines as New Radar Alliance Strengthens Defence Arsenal
Published on 06/19/2026 at 14:23 | Redaktion boerse-global.de
The German defence group is pressing ahead on multiple fronts — from setting up weapons production in Japan to integrating cutting-edge Spanish radar into its vehicle protection systems — while its chief executive calls for binding international rules on artificial intelligence in military hardware.
CEO Armin Papperger is preparing to travel to Tokyo in the coming days for talks aimed at establishing a joint venture with a local partner. According to Japanese business daily Nikkei, Rheinmetall intends to manufacture weapons directly in Japan for both the domestic market and export, marking a significant step beyond mere sales representation. The move would anchor the company’s industrial footprint in Asia.
At the same time, Papperger used his platform at the Eurosatory defence exhibition in Paris to push for global regulation of artificial intelligence in weapons systems, drawing a parallel with international nuclear arms treaties. He insisted that the “human in the loop” principle must remain inviolate — the final decision to fire should always rest with a person. He suggested an ethics council or a UN resolution as possible mechanisms.
In parallel, Rheinmetall is deepening its technological capabilities in counter-drone systems. The Spanish defence group Indra announced this week that its NEMUS radar is being integrated into Rheinmetall’s StrikeShield active protection system. NEMUS is a versatile sensor that tracks both slow-moving drones at speeds as low as ten metres per second and hypersonic projectiles exceeding 2,000 metres per second. Once the radar calculates the trajectory, StrikeShield selects and deploys the appropriate countermeasure, neutralising the incoming threat just before impact. The Indra technology is already embedded in major European defence programmes such as FAMOUS, giving Rheinmetall a clear leverage point for future upgrade contracts.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Financial details of the Indra collaboration have not been disclosed, and the deal will not produce an immediate revenue boost. But the company’s underlying momentum provides ample cover. In the first quarter of 2026, Rheinmetall generated sales of €1.94 billion, while the Weapon and Ammunition segment — which houses the protection systems — delivered an operating profit of €117 million and a margin approaching 20 per cent.
Analysts remain constructive on the stock despite a bruising run. Berenberg’s George McWhirter reiterated a buy recommendation with a price target of €1,750, implying a 46 per cent upside from the current level of €1,200.80, which gained 2.37 per cent on the day. McWhirter highlighted two near-term catalysts: the NATO summit on 7-8 July and the prospect of further large-scale orders. The valuation looks attractive given the strong earnings growth, he argued.
The shares have nonetheless fallen roughly 25 per cent year to date and trade nearly 40 per cent below the record high of €1,995 touched in September 2025. The next hard deadline is 6 August, when Rheinmetall reports second-quarter results. Before that, the NATO summit should provide the next directional signal.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
The order backlog in the defence division stood at more than €25 billion at the end of March, ensuring years of production visibility. For the full year 2026, management has set a sales target of up to €14.5 billion. The consensus dividend forecast stands at €15.18 per share, up from €11.50 in the prior year, while first-quarter earnings per share came in at €2.18. With the Indra integration reinforcing its systems-integration pitch and the Japan venture opening a new theatre, Rheinmetall is betting that its multi-layered strategy will eventually find favour again with investors.
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