Rheinmetall's Technical Warning: Overbought RSI and Shooting Star Signal Despite 53% Analyst Upside
25.05.2026 - 20:51:56 | boerse-global.de
A shooting-star candlestick pattern on Friday, an RSI reading of 90.0, and a stock trading nearly 25% below its 200-day moving average — Rheinmetall's chart is sending mixed messages. The defence group rallied 1.23% on Monday to close at €1,236.40, extending its weekly gain to just under 5%. But the recovery is still shallow: year-to-date the shares are down 22.8%, and over 12 months the decline stands at 32.88%.
The technical picture is notably overstretched. The relative strength index is deep into overbought territory, while the stock remains 11.93% below its 50-day moving average and 24.72% below the 200-day line. That gap from the 52-week high of €1,995.00 — a 38.03% drop — underscores how far the sell-off has carried. The recent low of €1,118.00 is just 10.59% beneath Monday's close, leaving little room for further downside before testing support.
Analysts, however, see substantial upside. The consensus price target stands at €1,886.11, roughly 53% above current levels. Jefferies recently trimmed its own target from €2,220 to €1,890, citing rising implementation risks and delays on large projects, but maintained a Buy rating. Analyst Chloe Lemarie argued the long-term relevance of Rheinmetall's product portfolio remains intact. With earnings per share forecast at €38.07 and the dividend expected to climb to €15.19 from last year's €11.50, the fundamental case still has its advocates.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Yet the market's caution was also reflected in the actions of a major shareholder. FMR LLC, better known as Fidelity, reduced its stake in Rheinmetall from 3.09% to below the 3% reporting threshold on 18 May 2026, with the notification following on 21 May. While portfolio adjustments by institutional investors are routine, the timing adds to the narrative of an equity that has lost nearly two-fifths of its value from the peak.
Operationally, the company is delivering. First-quarter revenue rose 8% year-on-year to €1.94 billion, while operating profit climbed 17% to €224 million, lifting the margin to 11.6%. Earnings per share improved to €2.18 from €1.92. The order backlog stood at €73 billion at the end of March, including €5.5 billion from the newly consolidated naval division. That backlog provides a solid buffer, even if the market is focusing more on execution risks than order volumes.
Adding a new dimension to the story, cartel experts have flagged potential over-reliance by the Bundeswehr on Rheinmetall, raising competition concerns. It does not undermine the broader defence boom, but it introduces a regulatory undertone that could weigh on future pricing power.
The next major check comes on 6 August 2026 with second-quarter results. If revenue and margins confirm the strong start to the year, the analyst scenario of a 50%-plus rebound gains credibility. A miss on margins, however, would reinforce the technical warning signals already flashing on the chart.
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