Rheinmetall’s Pivot to Drones and Lasers Fails to Convince as NATO Shifts Away from Tanks
Published on 07/11/2026 at 13:54 | Redaktion boerse-global.de
The defence giant is building new revenue streams in unmanned vehicles and directed-energy weapons, but the market remains focused on a fading core business and a single cancelled programme. Rheinmetall’s stock closed Friday at €993.00, down 1.90% on the day and 38% since the start of the year. The 12-month decline stands at 46.25%, leaving the shares more than 50% below the 52-week high of €1,995.00 hit last September and only 10% above the year’s trough of €902.50 reached in late June.
The underlying pressure is structural. At its summit in Ankara on 11 July, NATO signalled a clear shift away from heavy main battle tanks toward air defence, drones and electronic warfare. For Rheinmetall, that directly challenges its historic profit engine. Analysts project that tank-related revenues will account for just 20% of operating profit by 2030, down from 45% in 2023. The company is racing to adapt, but the market is punishing the transition.
New ventures are being rolled out at pace. On 8 July, Rheinmetall announced a joint venture with Croatian robotics specialist DOK-ING, named Rheinmetall Unmanned Vehicles d.o.o. The group had already taken a 51% stake in DOK-ING on 1 July, with founder Vjekoslav Majeti? retaining the remainder. The JV will focus on autonomous ground platforms for mine clearance, reconnaissance and combat support, aiming to turn Croatia into a European hub for defence robotics. Two days later, Rheinmetall and MBDA signed a contract for the ARGE HEL high-energy laser weapon system for the German navy, a programme valued in the mid-triple-digit million euro range and set for operational capability by 2029. On the same day, Kuwait placed its first order for the MASS ship protection system — eight vessels worth a mid-double-digit million euro amount. And on 7 July, Rheinmetall inked a letter of intent with Lockheed Martin to jointly produce ATACMS guided missiles in Europe.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Yet each positive headline has been overshadowed by the cancellation of the F126 frigate programme. The German government pulled the contract, valued at roughly €20 billion, opting instead for smaller Meko A-200 vessels from rival TKMS. Rheinmetall immediately halted its naval expansion plans, shelving around 1,000 planned jobs. MWB Research responded by downgrading the stock to “Hold” from a previous buy recommendation. Berenberg cut its price target to €1,600 from €1,750, citing the F126 loss directly. Jefferies retained a “Buy” rating.
The direct revenue impact appears manageable — analysts estimate the cancelled programme will cost Rheinmetall up to €300 million in lost sales this year, against an expected total revenue of around €14.2 billion. But the share price has fallen more than 18% since the news broke, leading some observers to argue the reaction is disproportionate. The deeper concern, flagged by Goldman Sachs, is whether Rheinmetall can efficiently execute its existing order book, which stands at over €70 billion. That question, rather than any single contract win or loss, seems to be weighing most heavily on investor confidence.
Technically, the stock remains under severe pressure. The current price sits about 15% below the 50-day moving average of €1,168.88 and more than 34% below the 200-day average. The relative strength index of 37.2 points to a market that is oversold rather than capitulating, while annualised volatility of nearly 69% underscores the intense uncertainty surrounding the name. Support around €900 is now being watched closely.
Attention now turns to the second-quarter earnings report due on 6 August. Investors will be looking for concrete signs that the laser weapon programme, the Croatian joint venture and the Kuwait order can offset the drag from the tank business and the F126 blow. The NATO pivot has made Rheinmetall’s transformation unavoidable — the market is waiting to see whether execution can match ambition.
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