Rheinmetall's Split Personality: Record Growth, Record Skepticism
Published on 09/09/2026 at 12:21 | Editorial boerse-global.de
The arithmetic of Rheinmetall's 2026 is hard to reconcile. Revenues are expanding at nearly 40 percent, the order book has swollen past €80 billion, and yet the share price has been cut by roughly a third since January. Investors are left holding a stock that keeps falling even as the company keeps climbing.
That disconnect was on full display this week. After a 2.7 percent bounce on Tuesday that carried the shares to €1,050.00, the stock reversed course on Wednesday, shedding 3.3 percent to close at €1,015.40. The monthly decline now stands at 11 percent, extending a slide that has erased about 35 percent of the company's market value since the start of the year.
The Gulf Between Price and Performance
The numbers behind the business tell a markedly different story. First-half 2026 revenue jumped 39 percent to €5.23 billion, while operating profit surged 74 percent to €786 million, lifting the margin to 15.0 percent. The order backlog reached €80.5 billion, providing the kind of multi-year visibility most industrial companies can only dream of.
Yet the market's skepticism has identifiable roots. Free cash flow came in at minus €1.62 billion for the half, underscoring how capital-intensive this growth trajectory has become. More troubling, management was forced to trim its 2026 revenue guidance to a corridor of €13.7 billion to €14.2 billion following a cancellation in the F126 frigate program. Add to that a political debate in Berlin over potential cuts to German ammunition spending from 2027 onward, and the case for caution becomes clearer.
The scale of the reversal from the stock's highs is stark. On October 3, 2025, Rheinmetall shares peaked at €2,007.00 — a level the current price sits roughly 48 percent below.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Washington Keeps the Pipeline Flowing
While the German budget debate dominates sentiment at home, the company's American operations continue to rack up wins. Late last week, Rheinmetall announced the delivery of spare parts for mobile air-start units to the U.S. Navy, the latest in a string of transatlantic contracts.
On September 2, American Rheinmetall received an order from Kongsberg Defence & Aerospace valued at approximately $710,000 for machined components for MCT-30 turrets. Production will take place at the company's Lapeer and Lansing facilities, with deliveries scheduled for 2026 and 2027. Individually, these deals are modest in financial terms, but collectively they illustrate the group's deepening roots in the U.S. defense ecosystem. That narrative is reinforced by the handover of the first Lynx XM30 prototype to the U.S. Army and a roughly €270 million investment to expand the Kassel site into a tank and logistics hub.
A European Production Revival
Across the Atlantic, Rheinmetall is also breathing new life into legacy production lines. Together with GDELS-SBS, the company has agreed to restart manufacturing of 120-millimeter cannons for Leopard tanks at its Trubia facility in Spain. The plant has already produced over 200 guns for the Leopard 2E and 100 for the SIAC-155/52 program, and is part of a broader reactivation of multiple cannon lines that began in mid-2024.
Political tailwinds remain visible as well. German Foreign Minister Johann Wadephul used a podcast appearance on Wednesday to push for more Ukrainian orders to be placed with German defense companies, arguing that Berlin's status as Kyiv's strongest supporter should extend to its domestic industrial base. He said he had asked Ukrainian President Volodymyr Zelensky to involve German firms more deeply in procurement processes. Meanwhile, a late-August agreement between Greece and Israel on a multibillion-euro air defense system underscores that European defense spending continues to climb — an environment fundamentally aligned with Rheinmetall's business model.
Analysts Split Down the Middle
The sell-side community reflects the broader ambivalence. Goldman Sachs maintains a bullish stance with a price target of €2,300, and even its more conservative scenario implies potential of €1,450 — well above current levels. That optimism rests on the operational momentum and the sheer size of the backlog.
MWB Research takes a far more circumspect view. On September 2, the firm upgraded Rheinmetall from Sell to Hold but set a price target of €1,050.00, essentially at the current share price — a signal that near-term headwinds, from the German munitions debate to cash flow constraints, are not easily dismissed.
Conference Season Offers a Chance to Reset the Narrative
The coming days may provide some clarity. Rheinmetall is scheduled to appear at the Bernstein 23rd Annual Pan-European Conference and the Jefferies Industrials Conference, giving management a platform to address the ammunition spending speculation directly and put the order pipeline in context.
For now, the stock remains caught between two competing realities: a company executing exceptionally well on the operational front, and a market that has decided the risks ahead — political, financial, and reputational — outweigh the rewards on offer.
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