Rheinmetall’s Powder Plant Expansion Gathers Pace as Analysts Trim Expectations and a Naval Headache Lingers
Published on 07/26/2026 at 17:03 | Redaktion boerse-global.de
Ground was broken on Thursday at Rheinmetall’s nitrochemie facility in Aschau am Inn, marking the next phase of the defence group’s ambitious push to scale up munitions output. The site is being primed to produce more than one million propellant charge modules annually, with the company funnelling roughly €350 million directly into the Bavarian location. That investment sits inside the broader “Firepower” programme, a €650 million initiative targeting annual propellant powder capacity of 20,000 tonnes by 2030. The local workforce is set to expand from 800 to 1,300 employees over the same period.
The expansion comes against a backdrop of sustained demand for artillery shells, a trend Rheinmetall has been capitalising on with a string of capacity upgrades. Just two weeks ago, the group delivered its first batch of 155mm shells — a low five-figure consignment — from the new Niedersachsen plant in Unterlüß to Ukraine. Closer to home, the Bundeswehr activated a €100 million call-off under the “Digitalisierung Landbasierter Operationen” (D-LBO) framework contract, a deal with a total volume of €1.2 billion. The military also handed Rheinmetall overall responsibility for the “InterRoC VII” research project, which focuses on developing autonomous military convoys.
Yet for all the operational momentum, the stock has been navigating a rougher patch. The shares closed last Friday at €1,032.60, up 1.29 per cent on the day and 9.13 per cent higher over the past 30 days. That recovery, however, still leaves the equity 48.55 per cent below its all-time high of €2,007.00 reached on 3 October last year. The gap underscores the scale of the valuation correction that has played out over recent months.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Analyst sentiment has shifted notably in response. On 20 July, UBS slashed its price target from €2,200 to €1,600 while maintaining a “Buy” rating. Barclays cut to €2,000, Deutsche Bank to €1,800, Berenberg to €1,600, and Jefferies to €1,300. Bank of America followed on the Tuesday of last week, reducing its target from €1,770 to €1,300 but also sticking with a “Buy” call. The BofA analysts cited a potential shift in NATO procurement priorities toward drones and precision weapons, a trend that could pressure demand for traditional armoured vehicles and munitions over the longer term. The wide spread of revised targets — ranging from €1,300 to €2,000 — reflects lingering disagreement over how to value the stock.
Adding to the list of headwinds is the cancellation of the F126 frigate programme. Rheinmetall is assessing the fallout and, in a worst-case scenario without mitigating measures, expects a revenue hit of up to €300 million for the 2026 financial year. The company also saw a potential maritime expansion route close when Thyssenkrupp Marine Systems ended negotiations to acquire the German Naval Yards shipyard last week — a bidding process in which Rheinmetall had been an interested party.
On the insider front, there was at least one signal of confidence. Late June saw Georgi Vermögensverwaltungs GmbH, an entity linked to supervisory board member Andreas Georgi, purchase Rheinmetall shares worth €47,665 at a price of €953.30 apiece. Such buys are often read by the market as a vote of faith from those closest to the business.
All eyes now turn to 6 August, when Rheinmetall publishes its second-quarter and first-half results for 2026. Analysts are forecasting earnings per share of €6.06, up from €2.90 in the same period last year. The numbers will offer a first clear look at whether the group’s capacity expansions and hefty order backlog are translating into tangible financial performance — and whether the recent share-price recovery has fundamental support or is merely a valuation bounce.
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