Rheinmetall’s Powder Factory Push: Europe’s Artillery Ambition Meets a Halved Share Price
Published on 07/24/2026 at 12:02 | Redaktion boerse-global.de
Rheinmetall has broken ground on a massive expansion of its powder plant in Aschau am Inn, Bavaria, committing roughly €350 million to a facility that will eventually churn out more than one million propellant charge modules annually. The ceremony on July 22, 2026, drew a who’s who of Bavarian politics — Minister-President Markus Söder, Economy Minister Hubert Aiwanger, and State Secretary Nils Schmid joined CEO Armin Papperger for the event — underscoring the strategic importance of a project that sits at the heart of the Düsseldorf-based defence group’s “Project Firepower” initiative.
The expansion is nothing short of dramatic for a site that has produced powder since the 1930s. Current annual output of 1,700 tonnes of powder will climb to 2,500 tonnes within two years, with full capacity of 4,200 tonnes targeted for 2028. Propellant charge module production will more than triple from 300,000 units to over one million. The workforce in Aschau is set to swell from roughly 800 to 1,400 employees, making Rheinmetall the region’s largest employer ahead of ZF Lifetech, according to local mayor Christian Weyrich. Across the entire group, management aims for 20,000 tonnes of powder per year by 2030.
Papperger framed the investment in stark geopolitical terms. The United States, he noted, holds only 20 to 30 percent of its required ammunition stockpiles and prioritises domestic needs, leaving Europe to fill the gap. “Without this plant, NATO would not be combat-capable,” he said, according to multiple reports. State Secretary Schmid pointed to the acute demand for 155-millimetre artillery shells, the workhorse munition in the Ukraine conflict. On the raw-material front, Papperger said the earlier critical shortage of nitrocellulose has been resolved, with reserves now sufficient for four years. Rheinmetall is also exploring replacing the cotton linters currently used with wood pulp to reduce import dependency.
A Portfolio in Motion: Selling Civilian Assets While Scaling Defence
The powder plant is only one piece of a broader corporate reshuffle. Just days before the ground-breaking, on July 20, the German Bundeswehr called down additional services worth €100 million under the “Digitalisierung Landbasierte Operationen” (D-LBO) programme. The order covers hardware and extra integration teams from a consortium of Rheinmetall Electronics and blackned GmbH, reinforcing the group’s recurring revenue stream from military digitisation.
Should investors sell immediately? Or is it worth buying Rheinmetall?
At the same time, Rheinmetall is shedding civilian exposure. In early July, it signed the contract to sell its Power Systems division for €350 million, with closing expected in the fourth quarter of 2026. The disposal aligns with the group’s sharper focus on defence, shedding lower-margin industrial activities as it doubles down on munitions and military electronics.
A Legal Headache in Moscow
Not all developments are smooth. A Moscow court is hearing a claim from the Russian prosecutor’s office and the company AG Garnison demanding €47.2 million from Rheinmetall over alleged unjust enrichment. The dispute stems from a contract to build and equip a combat training centre in Mulino, Russia. The hearing is being held behind closed doors, adding an element of uncertainty to an otherwise expansionary narrative.
The Order Book: Heading for €100 Billion
Papperger expects the group’s order backlog to surpass €100 billion by year-end, predicting a decade of elevated production demands for Europe’s defence industry. International expansion continues: Rheinmetall and Bulgaria have resumed talks over a joint munitions plant that would produce powder, 155-millimetre shells, and propellant charge modules. The project carries an estimated price tag of roughly €1 billion and would create about 1,000 jobs, though a founding agreement and secured financing remain pending. Bulgaria is hoping for support from the EU’s SAFE programme.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
A Stock That’s Lost Half Its Value
For all the operational momentum, Rheinmetall’s share price tells a different story. The stock closed at €1,019.40 in the most recent session, down 34.34 percent since the start of the year. From its 52-week high of €2,007.00 reached on October 3, 2025, the shares have shed 49.21 percent. Even the short-term bounce — the stock gained 4.87 percent over the past seven days to trade at €1,028.00 — looks modest against the 200-day moving average of €1,493.96, which sits roughly 31 percent above the current price.
Investors will get the next read on the company’s trajectory on August 6, 2026, when Rheinmetall reports second-quarter results. The numbers should show how recent order inflows and the Power Systems sale are feeding through. A week later, on August 27, management appears at the DZ Bank Expert Day, likely offering further detail on capacity expansion and portfolio pruning. Between the powder plant, the Bundeswehr digitisation contract, and the pending disposal of civilian assets, Rheinmetall has multiple moving parts — and the market is waiting to see whether the operational story can finally lift a stock that has been cut in half.
Ad
Rheinmetall Stock: New Analysis - 24 July
Fresh Rheinmetall information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
