Rheinmetall Stages a Show of Force on the ILA Floor, but Investors Are Waiting for the Earnings to Follow
03.06.2026 - 21:02:16 | boerse-global.de
Rheinmetall's stock has shed roughly 40% of its value since last autumn’s record high and trades near 1,192 euros — more than 25% lower year-to-date and 35% below where it stood twelve months ago. Yet when the company opens its 840-square-meter exhibition stand at the ILA Berlin air show on June 10, the narrative it will present could hardly be more bullish. The defense group is using the event to cement its identity as a full-spectrum supplier, from loitering munitions to space-based reconnaissance, and has just unveiled a transatlantic partnership that places it at the heart of Germany's future unmanned combat aircraft ambitions.
Boeing Deal and a Battle-Ready Drone
The marquee announcement is Rheinmetall’s appointment as system manager for the MQ-28 Ghost Bat, Boeing’s jet-powered unmanned combat aerial vehicle that has already completed over 150 test flights. Under the agreement, the Düsseldorf-based firm will adapt the platform to German requirements and take responsibility for operational deployment, maintenance, and logistics. The Bundeswehr is aiming to procure the so-called Collaborative Combat Aircraft by 2029. The Ghost Bat will be the centerpiece of the ILA display, but it is not alone. Rheinmetall is also showing off the Skyranger 30 air-defense system — this year mounted on a Boxer 8x8 armored vehicle and paired with an MBDA DefendAir guided missile — and the FV-014 loitering munition with a 100-kilometer range. A joint venture with ICEYE Space Solutions, which recently sealed a multibillion-euro Bundeswehr contract for SAR satellite reconnaissance, underscores the company’s push into space.
The Quarter That Weighed on the Stock
The operational picture may be expanding, but the first quarter of 2026 gave investors little to cheer. Revenue came in at 1.94 billion euros, an 8% year-on-year increase but roughly 15% below analyst consensus. The shortfall triggered a single-day selloff that erased more than 6% of the share price on June 1. Management attributed the miss to a production ramp-up that is skewed toward the second half of the year, and the full-year guidance remains intact: revenue of between 14 billion and 14.5 billion euros, which would represent growth of up to 45%. The order backlog has swelled to a record 73 billion euros, a figure that suggests demand is not the issue.
Should investors sell immediately? Or is it worth buying Rheinmetall?
A Two-Horse Race in the Drone Competition
The Ghost Bat agreement does not guarantee Rheinmetall the eventual Bundeswehr award. Defense Minister Boris Pistorius has stressed that no decision has been made, and a rival consortium led by Airbus and Kratos is offering a Europeanized version of the XQ-58A Valkyrie. Both proposals carry strong industrial arguments: Boeing-Rheinmetall can point to an existing partnership and proven flight test data, while Airbus-Kratos emphasizes European production sovereignty. The outcome will be one of the most closely watched procurement decisions in German defense.
Analyst Ranges Tell a Story of Uncertainty
Twenty-one analysts following Rheinmetall have a median price target of roughly 1,889 euros, implying more than 50% upside from current levels. Yet the dispersion is enormous — the highest and lowest targets are separated by over 1,090 euros. That gap reflects deep disagreement about how quickly the record backlog can be converted into recognized revenue and margin. CEO Armin Papperger laid out a concrete pipeline during the earnings call: nominations worth approximately 20 billion euros in the second quarter (including the Lynx program in Romania and a battle tank program in Italy) and opportunities of around 60 billion euros in the second half, driven by the Arminius program and Ukrainian procurement.
All Eyes on the Second Half
For now, the technical picture offers little comfort. The stock sits well below both its 50-day moving average and its 200-day average, and the relative strength index of 40 points to persistently weak momentum — though not yet to an oversold condition. Whether the ILA Berlin week, with the Ghost Bat partnership and a sprawling systems exhibition, can shift sentiment depends on whether the market sees it as a credible bridge to the earnings inflection point that management is promising for the second half of 2026.
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