Rheinmetall's Croatian Foray and Laser Deal Fail to Impress a Skeptical Market
Published on 07/10/2026 at 16:07 | Redaktion boerse-global.de
Rheinmetall’s most eventful week in recent memory saw the defence contractor unveil a Croatian joint venture, secure a contract for a high-energy laser weapon system, and ink a memorandum of understanding with Lockheed Martin to produce ATACMS missiles in Germany. Yet the stock, mired in a protracted sell-off, barely flinched. After hitting a 52-week low of €902.50 in late June, the shares have recovered only modestly, trading at €990.10 on Thursday—a 2% drop on the day—while other data points show the stock at €1,010.40, underscoring the volatility that has come to define the name.
The disconnect between operational momentum and market sentiment could hardly be starker. The Düsseldorf-based group’s order book is swelling with headline-grabbing deals, but investors are increasingly focused on the time it will take to convert those contracts into cash flow and margins.
On 8 July, Rheinmetall announced it had acquired a 51% stake in Croatian robotics specialist DOK-ING for an undisclosed sum, with founder Vjekoslav Majeti? retaining the remainder. The new joint venture, Rheinmetall Unmanned Vehicles d.o.o., aims to turn Croatia into a European hub for unmanned ground vehicles, combining DOK-ING’s three decades of experience with Rheinmetall’s manufacturing muscle. Development and production will remain in Croatia, focusing on autonomous platforms for combat support, engineering, and mine clearance. The move was inaugurated in the presence of Rheinmetall CEO Armin Papperger and Croatian Prime Minister Andrej Plenkovi?.
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The following day, the company signed up as part of the HEL consortium alongside MBDA Deutschland to supply a high-energy laser weapon system for the German Navy. The contract, worth a mid three-digit million euro sum, targets operational readiness by 2029. Then, on 10 July, Rheinmetall bagged its first order from Kuwait for the MASS naval decoy system, including associated countermeasure ammunition, valued in the mid-double-digit million euro range. That deal followed a 7 July memorandum with Lockheed Martin to co-produce ATACMS guided missiles in Europe, with rocket motor production at the UnterlĂĽĂź site slated to begin as early as 2027.
These announcements come on top of a €5.7 billion artillery ammunition order from Romania in June—the largest single international contract in the company’s recent history—and ongoing NATO procurement for Ukraine support. Rheinmetall is also ramping its 155mm shell capacity to around 1.5 million units annually by 2030.
Despite this flurry, the stock continues to slide. According to one report, Rheinmetall has lost 38.18% this year; another puts the year-to-date decline at 36.91%. The 12-month loss stands at 45.31%. Over the past week, the shares have fallen between 7.89% and 9.74%, depending on the data source, while the monthly decline ranges from 15.50% to 17.20%. The relative strength index hovers around 36.9 to 38.6, deep in oversold territory. Annualized volatility is running at roughly 69–70%, reflecting extreme uncertainty.
The market’s skepticism stems from a fundamental reassessment of the defence sector’s investment thesis. The era of simply buying on policy pledges is over; investors now demand evidence that ballooning backlogs will translate into sustainable earnings and free cash flow. Projects like the laser system, which will not generate revenue until the end of the decade, or the Croatian joint venture, which will take years to reach production, offer little near-term comfort. Even the Romanian mega-order will be recognised only gradually over its multi-year delivery schedule. Rheinmetall’s shares, trading at roughly half their September 2025 record high of €1,995, are pricing in that caution. With the current price just 9.71% above the 52-week low, there is little margin for error. The next quarterly results will be a crucial test: can the defence giant show that its torrent of orders is finally translating into fatter margins and stronger cash generation? If not, the stock’s slide may have further to run.
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