Rheinmetall’s US Drone Play Meets a Skeptical Market
27.05.2026 - 20:13:13 | boerse-global.de
The German defense group is pushing deeper into unmanned warfare, but shareholders remain unimpressed. American Rheinmetall has teamed up with specialist Harbinger to develop autonomous ground vehicles for the Pentagon, combining Rheinmetall’s military expertise with Harbinger’s hybrid-electric platform and drive-by-wire system. First demonstrators are slated for summer 2026, giving the group a potential foothold in the US military’s push to modernize its logistics fleet with unmanned systems. Rheinmetall also landed a three-digit million euro Bundeswehr order for laser-light modules.
Yet the stock has barely budged. At around €1,241 on Wednesday, Rheinmetall shares are down 22.88% year to date, and they sit nearly 38% below their 52-week high of almost €2,000. The relative strength index hit 90, signaling an oversold condition, while the 52-week low of €1,118 is only about 10% away. The disconnect between operational milestones and share price performance is stark.
This week’s investor conferences — the dbAccess European Champions Conference in Frankfurt and Erste Group’s event in Warsaw — provided a forum for management to defend the full-year forecast. After first-quarter results released on May 7, Rheinmetall reiterated its 2026 guidance: group revenue between €14.0 billion and €14.5 billion, with an operating margin around 19%. Q1 revenue came in at €1.938 billion, up 8% from a year earlier but below market expectations, while the operating margin of 11.6% landed within the target range.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The order backlog has swelled to €73 billion from €56 billion a year ago, now including Naval Systems with roughly €5.5 billion. But a sharp deterioration in cash flow is raising eyebrows. Operating free cash flow swung to negative €285 million in the first quarter from positive €243 million in the prior-year period. Rheinmetall attributes the drop to lower customer advances, inventory buildup and higher working-capital requirements tied to planned revenue growth — a plausible explanation that nonetheless demands careful scrutiny from analysts.
Segment performance varied. Air Defence drove the strongest growth, with revenue rising €57 million to €192 million and operating profit nearly doubling to €30 million, fueled by Skynex and Skyranger projects for European customers. Vehicle Systems posted moderate gains, while Weapon and Ammunition held steady. The next hard data point comes on August 6 with the first-half report, which will test whether deliveries in ammunition and air defense, along with Naval Systems integration, translate into measurable progress.
For now, the stock trades well below its 200-day moving average of €1,638, a technical reminder that bullish sentiment is in short supply. Rheinmetall’s Harbinger partnership is a long-range bet on US autonomy programs, but until the commercial payoff becomes visible — and the cash flow story improves — investors appear content to wait and watch from the sidelines.
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