Rheinmetall's Dual Push into Laser and US Rocket Production Fails to Arrest the Slide
Published on 07/11/2026 at 03:33 | Redaktion boerse-global.de
Germany's largest defence contractor just added two more headline-grabbing projects to its pipeline – a naval laser weapon for the Bundeswehr and a joint venture with Lockheed Martin to manufacture ATACMS components on home soil – yet the shares keep heading south. The stock closed Friday at €993.40, down 1.68% on the day, extending a weekly loss of 9.44% that has left the equity 37.97% lower since the start of the year.
The laser contract, signed with the German Navy and valued in the mid-three-digit million-euro range, covers a high-energy weapon system designed principally to counter drone swarms. Rheinmetall and its partner MBDA Deutschland have established the High-Energy Laser Naval Demonstrator Working Group to develop the technology, with operational readiness targeted by 2029. The company will cover the entire kill chain – detection, tracking and engagement – while relying on domestic suppliers to preserve what it calls "national sovereignty" in a critical defence capability.
That same week, Rheinmetall inked a memorandum of understanding with Lockheed Martin to produce solid-propellant motors and other components for ATACMS missiles at its Unterlüß site in Lower Saxony. Production is slated to begin in 2027, though final assembly of the complete missile has not been officially confirmed. The timing aligns with growing European demand for self-sufficient rocket manufacturing, especially as NATO members look to reduce dependence on non-European supply chains. ATACMS is already integrated into HIMARS and M270 MLRS launchers in use across the continent.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The two deals join an already thick order book. In the second quarter of this year, Rheinmetall clinched a pair of artillery contracts for Ukraine: a NATO country ordered several thousand 155mm rounds worth a mid-double-digit million sum, and Ukraine itself placed a direct order for a low-five-digit quantity of shells in the high-double-digit million range. Delivery from plants in Spain and Germany is due by April 2027. On the naval side, Kuwait is acquiring Multi Ammunition Softkill Systems (MASS) for eight Al Dorra-class vessels, a low-double-digit million contract that includes Omnitrap decoy ammunition in the high-single-digit millions. Separately, the company expanded its framework agreement with the RENK Group to supply drive systems for KF41 Lynx vehicles, adding more than €270 million to the original agreement.
None of this has lifted the share price. The stock now sits 50.21% below its 52-week high of €1,995, touched in September last year, and just 10.07% above the June 25 low of €902.50. The relative strength index at 37.2 points to a neutral-to-oversold zone, while annualised volatility remains elevated at 68.82%. The 200-day moving average is a distant 34.57% above the current price.
Analysts and traders attribute the disconnect partly to a broader rotation out of defence stocks that followed the recent NATO summit, as investors reassess valuation levels after a multi-year rally. With the sector now pricing in years of elevated spending, the market appears to be looking for near-term proof that the order bonanza is translating into earnings and margins. Rheinmetall's second-quarter results, due in August, will provide the first hard evidence. Until then, even a laser weapon destined for the German fleet and a rocket partnership with the world's largest defence contractor aren't enough to halt the slide.
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