Rheinmetall Freezes 1,000 Marine Jobs After Losing F126 Frigate Contract, Shifts Focus to ATACMS and Artillery
Published on 07/08/2026 at 08:52 | Redaktion boerse-global.de
Rheinmetall’s stock ended Tuesday at €1,116.40, nursing a year-to-date loss of 30.29% and a 38.83% slide over the past twelve months. The paper has shed 44% from its October 2025 all-time high of nearly €2,000. Yet over the last seven sessions it managed a 5.84% uptick — a flicker of recovery that still leaves it 6% below its 50-day moving average and 27% below the 200-day line. The relative strength index sits at 48.8, a neutral reading that suggests the market is hunting for direction rather than signalling exhaustion. Annualised volatility of 70.15% underscores just how jumpy the stock has become.
The root cause of the unease lies not in the group’s headline numbers but in a specific programmatic blow. The German government handed management a clear rebuff on the F126 frigate programme, awarding the contract to ThyssenKrupp Marine Systems instead. Rheinmetall had expected to secure a nomination worth around €20 billion. That hope has evaporated, and the immediate financial toll is already being felt: the company now estimates it will lose up to €300 million in revenue in the current financial year alone. In response, the board has pulled the emergency brake on its marine division, halting the build-up of roughly 1,000 new positions that had been planned after the acquisition of Naval Vessels Lürssen.
The blow lands at a moment when Rheinmetall’s operational performance is otherwise strong. First-quarter revenue climbed 8% to €1.9 billion and operating profit jumped 17% to €224 million. The order backlog hit a record €73 billion in March, up from €63.8 billion at the end of December. Those are numbers that would normally fuel a rally in any other sector, but defence investors are now looking past aggregate figures and demanding proof that the group can convert its pipeline into predictable cash flows. The F126 reversal has raised questions about project execution and the reliability of large-ticket procurement expectations.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The company is not standing still. On the sidelines of the NATO summit, chief executive Armin Papperger signed a letter of intent with Lockheed Martin to establish a joint venture in UnterlĂĽĂź, Lower Saxony. The facility will produce ATACMS short-range missile motors, marking the first manufacturing site for the system outside the United States. Production is slated to begin in 2027, positioning Rheinmetall as a critical European hub for NATO precision-strike capability just as allies scramble to replenish depleted arsenals.
At the same time, the core artillery business is humming. A NATO member state has ordered thousands of artillery shells destined for Ukraine, a contract in the mid-double-digit millions that is already booked. Production is split between subsidiaries in Spain and Germany, with full delivery scheduled by April 2027. Management has set a longer-term target of reaching an annual capacity of 1.5 million shells by 2030.
UBS remains upbeat, reaffirming a buy rating with a price target of €1,600. The bank points to intact secular defence trends and the strong start to the year as reasons for optimism. But the market’s scepticism is not easily dismissed. Rheinmetall confirmed its full-year guidance as recently as May, but the F126 setback has forced a review of whether that forecast can stand. The uncertainty over a possible downward revision is weighing more heavily on the share price than any general market weakness.
Investors will get greater clarity on August 6, 2026, when the company publishes its second-quarter report. Management is expected to detail exactly how it intends to offset the F126 shortfall and whether the full-year outlook will be adjusted. Until then, the stock sits suspended between a record backlog and a single cancelled programme that has exposed the risks lurking behind the defence sector’s glossy headlines.
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