Rheinmetall Faces a Defining Quarter: Earnings, Expansion, and Export Curbs Collide
Published on 07/27/2026 at 07:22 | Redaktion boerse-global.de
Rheinmetall is entering a pivotal stretch that will test whether its record order book and ambitious capacity expansion can outweigh the headwinds that have knocked the stock nearly in half from its peak. The Düsseldorf-based defence group is racing ahead with a €650 million powder plant build-out in Bavaria, fending off newly imposed Chinese export controls, and bracing for a half-year earnings report on 6 August that analysts expect to show a dramatic profit surge.
The numbers due next month are striking. Consensus forecasts put second-quarter revenue at roughly €3.12 billion, a 28 percent jump from the €2.43 billion reported a year earlier. Earnings per share are seen more than doubling to €6.06 from €2.90 in the same period of 2025. The projected leap is underpinned by a record order backlog of around €73 billion, a figure that gives the company rare visibility in an industry often subject to political stop-and-go.
Groundbreaking in Aschau Amid a Geopolitical Squeeze
On 22 July, Rheinmetall broke ground on one of Europe’s largest propellant powder factories in Aschau am Inn. The company is investing €350 million at the site itself as part of a group-wide programme totalling €650 million. Current annual output stands at 1,700 tonnes of powder and 300,000 propellant charge modules. Within 24 months the plant is expected to add 2,500 tonnes of powder, more than five million combustible components, and over one million modular propellant charges, with full capacity slated for 2028. The workforce at Aschau will grow from 800 to 1,400 employees as new production lines come online in 2027.
The expansion is proceeding even as Beijing tightens its grip. On Thursday, China imposed export controls on Rheinmetall and 13 other European companies, targeting goods with both civilian and military applications. The group has signalled that the restrictions will not derail its growth trajectory, insisting that the capacity build-out in Germany will continue at full speed.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Laser Weapons and NATO’s Spending Wave
Separately, the German government is planning to award Rheinmetall a contract for a laser weapon system to counter drones, bypassing a competitive tender. Three demonstrator units for the navy are envisaged, with delivery by the end of the decade and a price tag in the mid three-digit million range. Green Party budget politician Sebastian Schäfer has criticised the lack of an open tender, pointing to Australian rival EOS, which he says offers more powerful systems at significantly lower cost. Rheinmetall chief executive Armin Papperger dismissed the objection with a terse response: “We can deliver.”
The laser project fits into a broader NATO push. At the alliance’s summit in Ankara in early July, ten financial institutions including Deutsche Bank committed $210 billion in defence industry investments under an “Innovation Scale-up Package.” A dedicated initiative called “Drone Edge” is set to channel $40 billion into counter-drone capabilities over five years — a backdrop that lends further strategic logic to Rheinmetall’s spending spree.
Stock Stabilising, but Still Nursing Deep Wounds
After a brutal first half, the shares are showing tentative signs of recovery. On Friday the stock closed at €1,032.60, up 1.29 percent on the day and 4.58 percent higher on the week. Yet the longer-term picture remains sobering: the share price has fallen 33.49 percent since the start of the year and sits 48.55 percent below the all-time high of €2,007 reached in October 2025.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
The sell-off that began in late June had two proximate causes. On 25 June, Jefferies downgraded the stock and slashed its price target by roughly 31 percent to €1,300. Almost simultaneously, the cancellation of the F126 frigate programme weighed heavily on sentiment. Whether strong divisions such as air defence and digital systems can offset the naval setback is a question the 6 August report will help answer.
If the earnings estimates prove accurate, the half-year numbers could provide the catalyst for a trend reversal after months of decline. The juxtaposition is stark: the stock has roughly twenty-folded since the start of the war in Ukraine, yet the recent pullback has erased a significant chunk of those gains. Rheinmetall’s valuation now hinges squarely on whether it can convert its mountainous order book into sustained earnings growth — and whether the political and geopolitical currents that have lifted the defence sector remain as favourable as they have been.
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