Rheinmetall's Rally Tests €1,200 Ceiling as Sector Rival's Forecast Upgrade Fuels Defence Optimism
Published on 08/13/2026 at 10:20 | Redaktion boerse-global.de
The defence sector's momentum is being written in the order books of its smaller players. When ThyssenKrupp Marine Systems (TKMS) raised its full-year guidance on Thursday, the market read it as a sector-wide confirmation — and Rheinmetall's shares rode the wave, climbing 1.2 percent to €1,188.60.
TKMS now expects revenue growth of 10 to 12 percent for the current fiscal year, a sharp upward revision from the 2 to 5 percent previously guided. The submarine and naval specialist also lifted its operating margin outlook to as much as 6.5 percent, underpinned by a nine-month performance that saw sales jump 19 percent to €1.89 billion and earnings advance 13 percent to €110 million. Its order backlog stands at €20.1 billion, boosted by a four-frigate contract for the German Navy with options for four additional vessels, alongside submarine deals with Canada and India. Shares in TKMS spiked more than 15 percent intraday, with Metzler Bank setting a price target of €115.
For Rheinmetall investors, the read-across is straightforward: the two companies are increasingly viewed as twin barometers of European defence spending, and a surge in orders at one tends to validate the growth narrative for the other.
A Chart Level That Decides the Next Move
Rheinmetall's stock has now advanced roughly 22 percent over the past 30 days, a recovery that has brought it to a critical juncture. The €1,200 resistance zone looms large — a sustained breakout could accelerate the rebound, while another rejection risks pulling the shares back into consolidation.
Even with the recent gains, the equity remains far from its October 2025 peak of €2,007.00, still trading about 41 percent below that level. The drag has been the company's lowered revenue outlook, a direct consequence of losing the F126 frigate programme.
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Germany pulled the plug on the €12.8 billion project in early July after €2.3 billion had already been spent, pivoting instead to eight smaller MEKO A-200 frigates from TKMS. Rheinmetall had been slated as prime contractor — a role that vanished with the cancellation.
Strong Half-Year, Trimmed Guidance
The operational picture, however, tells a different story. Rheinmetall's second quarter delivered sales of €3.289 billion, up 69 percent year-on-year, with operating profit climbing 115 percent to €562 million. The order book swelled to over €80 billion by June 30, up from roughly €56 billion a year earlier.
Yet the F126 loss forced management to pare back its 2026 outlook: revenue is now guided at €13.7 to €14.2 billion with an operating margin around 19 percent, and the order backlog target has been trimmed from the earlier €100 billion-plus ambition.
New business is softening the blow. Second-quarter nominations reached €11.371 billion, including a loitering munition contract with the Bundeswehr and a SAFE package with Romania. July brought further wins: a laser-weapon deal worth up to €462 million with MBDA Deutschland for frigate-based drone defence, and a €100 million vehicle fleet digitalisation order tied to the D-LBO framework, which carries a total volume of around €1.2 billion.
Chief executive Armin Papperger described the so-called Arminius project — up to 3,000 Boxer armoured vehicles for the Bundeswehr — as entering its final decision phase. Negotiations are slated for August, with a contract expected in September and a final call in the first or second week of December. Meanwhile, Rheinmetall is working with Lockheed Martin to produce ATACMS missiles at its Unterlüß facility, aimed at replenishing US arsenals.
Analysts Split, Security Concerns Mount
Reactions to the half-year numbers have been divided. mwb research downgraded the stock from Hold to Sell on August 6, cutting its price target from €1,150 to €1,050. Other houses took a more favourable view of the operational performance, retaining buy recommendations despite trimmed targets. The consensus price objective sits near €1,700, with estimates ranging from €1,350 to €2,300 — a wide spread reflecting genuine uncertainty about the pace of future order intake.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
Beyond the balance sheet, attention has turned to Papperger's personal security. According to dpa, the CEO has been placed under protection matching that of the German chancellor, following suspected Russian assassination plots. Papperger's response was characteristically blunt: "Kneifen gilt nicht" — no backing down. He had previously urged greater German investment in drone defence after an explosive-laden drone was found at Leipzig/Halle airport in early August.
That incident has also stirred political debate. Saxony's interior minister, Armin Schuster, is now considering a state security council modelled on Germany's National Security Council, aimed at protecting a three-digit number of critical infrastructure sites such as energy and water supplies. Federal prosecutors are investigating.
For the defence sector as a whole, such developments reinforce the investment narrative — even as Rheinmetall's share price works to reclaim the ground lost since its October highs. The stock closed Wednesday at €1,175.00, up 2.9 percent, and remains down 24 percent year-to-date. The path back to its former valuation runs through the €1,200 barrier, and through the order flow that will determine whether the recovery has legs.
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