Rheinmetall's Deal Spree Runs Into a Wall of Short Bets as F126 Cancellation Lingers
Published on 07/11/2026 at 16:07 | Redaktion boerse-global.de
Rheinmetall sealed a joint venture in Croatia, a naval defence order from Kuwait and a laser weapon contract with the German navy all within the space of a week. Yet the stock closed at €993.00 on Friday, down 1.9% on the day and 9.48% lower than the previous week. Over the past 30 days the shares have shed nearly 17% of their value. The disconnect between operational momentum and market sentiment has rarely been starker.
Hedge funds are turning that gap into a bet on further losses. Capital Fund Management SA, which had trimmed its net short position on July 3 from 0.65% to 0.59%, reversed course six days later. On July 9 the fund increased its short exposure again to 0.60%, crossing the disclosure threshold. That zigzag reflects the uncertainty swirling around the defence group even among professional investors. Capital Fund is not alone: Marshall Wace, Qube Research & Technologies and Millennium International Management all hold reportable short positions in Rheinmetall.
The root of the skittishness lies in a single government decision late in June. Berlin unexpectedly scrapped the multi-billion-euro F126 frigate programme, awarding the contract instead to rival TKMS. Rheinmetall had counted on roughly €20 billion in orders from the project and immediately halted its naval expansion plans, cutting 1,000 planned jobs. MWB Research responded by downgrading the stock from "Buy" to "Hold". The direct revenue hit for the current year is estimated at up to €300 million — small relative to the €14.2 billion in expected annual sales, but the psychological blow has been severe.
The technical damage is plain to see. From the September 2025 record high of €1,995.00, the stock has slid more than 50%. It now trades barely 10% above the 52-week trough of €902.50 set in late June. The 50-day moving average sits at €1,168.88, some 15% above the current price, while the 200-day average is 34.59% higher. The relative strength index of 37.2 points to pressure, though not yet an extreme oversold condition. Annualised 30-day volatility of nearly 69% underscores the jitters around the name.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Against that backdrop, the flurry of contract wins looks almost incongruous. On July 7 Rheinmetall signed a letter of intent with Lockheed Martin to jointly produce ATACMS guided missiles in Europe. The next day it announced a Croatian joint venture, Rheinmetall Unmanned Vehicles d.o.o., with local specialist DOK-ING to turn the country into a European hub for unmanned systems. Rheinmetall had already taken a 51% stake in DOK-ING on July 1, leaving founder Vjekoslav Majeti? with the remainder. Research and development will stay in Croatia, focusing on autonomous ground platforms for combat support, engineering and mine clearance.
July 9 brought news that the German Bundeswehr had commissioned a high-energy laser weapon system for the navy from the HEL consortium of MBDA Deutschland and Rheinmetall Waffe Munition. The contract runs into the middle three-digit million-euro range, with operational capability targeted by 2029. A day later Kuwait ordered the MASS ship protection system for eight naval vessels, including decoy ammunition, in a deal worth a mid-double-digit million-euro sum.
Analysts remain deeply split on what the sum of these parts is worth. JPMorgan cut its price target from €1,500 to €1,350 with a "Neutral" rating, citing a faster-than-expected shift in defence technology and slower German contract awards that prompted it to slash earnings estimates through 2030. Berenberg lowered its target to €1,600 from €1,750 but reiterated "Buy". Bernstein stuck with "Outperform" and a €1,900 target. Jefferies kept a "Buy" on Rheinmetall, alongside peers RENK and Hensoldt, while trimming its price objective to €1,300. The gap between the most bearish and most bullish price target now stands at €550 — more than half the current share price.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
Beyond the F126 shock, a deeper question has taken hold. Goldman Sachs has asked whether Rheinmetall can efficiently execute its bulging order backlog of more than €70 billion. That concern, rather than any single cancelled contract, may prove the lasting drag on investor confidence. Rheinmetall's first-quarter earnings already missed expectations, adding to the scepticism.
The next major catalyst is the half-year report due in August. Until then, the tug-of-war between a steady stream of new orders and the multiplying short positions will define the stock’s direction. Capital Fund Management’s latest reversal is a telling sign: even the professionals cannot agree on where Rheinmetall goes next.
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