Rheinmetall’s €73 Billion Order Book Faces a Double Squeeze: Budget Cuts in Berlin and Export Curbs from Beijing
Published on 07/28/2026 at 19:01 | Redaktion boerse-global.de
Rheinmetall shares have clawed their way back above the psychologically important €1,000 threshold, but the relief rally is unfolding against a backdrop of fresh political and supply-chain headwinds that threaten to cap any sustained recovery. The stock climbed 2.4% on Tuesday to €1,085.20, extending a bounce that began after the shares touched a 52-week low of €902.50 on June 25. Over the past seven trading sessions, the defence group has gained 8.35%, while the monthly performance now stands at a more robust 11.73%.
The technical picture offers cautious optimism rather than outright conviction. The relative strength index has moved to 55.7, signalling neutral-to-slightly-positive momentum without flashing any overbought warning. Yet the stock remains a staggering 27% below its 200-day moving average of €1,485.23, and the broader downtrend that has wiped 30.10% from the share price since the start of the year remains firmly intact. The all-time high of €2,007.00, set in October 2025, is still nearly 46% out of reach.
Investors are now weighing two distinct risks that have emerged almost simultaneously. On the supply side, Beijing has tightened export controls on dual-use components — parts that Rheinmetall relies on for both civilian and military production. Analysts warn that restrictions on electronic control systems and other critical inputs could slow the company’s ambitious munitions capacity expansion, including the new powder plant in Aschau am Inn, whose foundation was laid just last week as part of a long-term strategy to reduce dependence on international suppliers.
Should investors sell immediately? Or is it worth buying Rheinmetall?
On the demand side, a Bloomberg report on Germany’s 2027 budget draft has rattled the defence sector. The proposal allocates roughly €9.6 billion for munitions purchases, down from approximately €11 billion in the current year. While the figures remain preliminary and the budget process is still unfolding, the potential reduction strikes at the heart of Rheinmetall’s business model, which is heavily exposed to tanks, artillery and ammunition. Germany’s overall defence spending is expected to continue rising in the medium term, but the shift within individual line items has unnerved investors who had piled into defence stocks on the back of Europe’s rearmament narrative.
The contrast between the company’s operational strength and its share price weakness is stark. Rheinmetall’s order backlog has swelled to €73 billion, a roughly 31% increase year-on-year. That record pipeline, however, has done little to prevent the stock from sliding since its peak last October, and the disconnect remains a central puzzle for market observers. The cancellation of the F126 frigate programme in early July added another layer of uncertainty, with the company estimating a potential revenue hit of up to €300 million in 2026. Management has argued that strong order momentum in munitions and land systems will more than compensate for the loss.
All eyes are now on the full second-quarter report, due on August 6. Rheinmetall has already confirmed its full-year guidance for revenue growth of more than 60%, and the market will be looking for reassurance that the Chinese export curbs and the German budget signals are not derailing that trajectory. The company has also flagged a nomination volume in the low double-digit billions for the second quarter, which would provide further evidence of sustained demand.
The annualised 30-day volatility remains elevated at 68.12%, reflecting a stock that continues to swing sharply on political signals and contract news. Analysts see a consensus price target of €1,705.56, implying theoretical upside of more than 50% from current levels — but bridging that gap will require the August report to deliver clarity on both the growth outlook and the resilience of the supply chain. For now, the recovery above €1,000 is a welcome milestone, but the path from here is anything but clear.
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