Rheinmetall Expands Nordic and Baltic Footprint as Analysts Flag 95% Upside
Published on 10/01/2026 at 15:31 | Editorial boerse-global.de
Rheinmetall is pushing deeper into Europe's periphery, betting that a sustained surge in defense demand will reward capacity built today. On Thursday, subsidiary Rheinmetall Nordic opened a new facility in Skoppum, Norway, while ground was broken the same day on a Leopard 2A8 assembly and repair plant in Kaunas, Lithuania.
The twin moves extend the Düsseldorf group's manufacturing reach at a moment when investors are fixated less on order intake and more on how quickly those orders can actually be delivered.
A Norwegian Hub for Sensors and Fire Control
The Skoppum site spans 4,579 square meters and is designed for 127 employees, with 100 starting immediately. The footprint can be enlarged to roughly 5,000 square meters if needed, and a 15-year lease underscores the long-term commitment. Work there will bundle development, production, system integration and logistics, focused on electro-optical systems, fire control, situational awareness and weapons accessories. The facility serves Norwegian armed forces alongside international customers.
In Lithuania, construction began in the Kaunas Free Economic Zone on a 13,000-square-meter factory for building and servicing heavy combat vehicles. Joint venture Lithuania Defense Services plans to invest around EUR 50 million, with builder YIT Lietuva handling a EUR 29 million construction contract. Completion in Karm?lava is slated for November 2027, and the first Leopard 2A8 assembled on site should roll out by late 2028. The project envisions up to 100 production and administrative jobs.
Share Price Steadies After a Bruising Year
The market's initial reaction was muted relief. Rheinmetall shares changed hands at EUR 964.50 on Thursday, up 0.9%, though the stock has shed 38% since the start of the year as the broader sector absorbed sharp corrections. The prior session told a similar story of caution: Tuesday saw the paper touch a downtrend low of EUR 945.50, followed by a stabilization just above that level on XETRA on Wednesday, leaving the stock still well below the round EUR 1,000 mark.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Despite the pullback, sell-side observers see the current level as a buying opportunity. Pointing to full order books and further government defense spending, market watchers put the upside potential at roughly 95%.
Switzerland Emerges as a Key Export Anchor
How deeply Rheinmetall is already embedded internationally shows up in Swiss data. Of the CHF 2.77 billion in war materiel export permits approved for 2025, Rheinmetall captured the lion's share: three subsidiaries and one joint venture accounted for permits worth CHF 1.96 billion. An analysis by weekly newspaper WOZ highlights the group's outsized role in Switzerland. Rheinmetall Air Defence CEO Oliver Dürr told broadcaster SRF that deliveries to Saudi Arabia would proceed once permits are granted. Swiss voters will decide on a proposed loosening of the war materiel law in two months.
Papperger's EUR 50 Billion Vision
Global demand is also fueling CEO Armin Papperger's long-range ambitions. Annual revenue stood at just under EUR 5 billion a decade ago and now approaches EUR 10 billion. By 2030, Papperger is targeting EUR 50 billion. A substantial chunk is expected to come from the Bundeswehr: up to 40% of the EUR 100 billion special fund could flow to Rheinmetall, according to the CEO, keeping the Düsseldorf group's capacity booked for years.
Hedging Against Supply Chain Risk
Alongside the order boom, Rheinmetall is bracing for supply chain disruptions. US outlet POLITICO reported that German firms are stockpiling rare earths amid the threat of new trade restrictions, and the International Energy Agency notes that processing is heavily concentrated. Chinese controls in 2025 had already triggered production cuts at Western manufacturers.
Rheinmetall responded in a September investor presentation, building higher safety stocks and evaluating strategic alternatives for critical raw materials. A broader supplier base is meant to guard against potential outages.
Sector Rotation Adds a Wrinkle
The operating expansion has unfolded against a restless backdrop for European defense makers. A Bank of America sector study triggered repositioning, with analyst David Holmes expressing a preference for air defense, sensors and combat networks while mechanical component makers absorbed downgrades. That investor reticence has at times weighed on the Düsseldorf shares as well. Attention is increasingly trained on how fast brimming order books convert into deliveries—and on keeping supply chains intact so that promised shipments in Skoppum and Kaunas leave the halls on schedule.
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