Rheinmetall's Record Order Book Can't Halt Slide as Analysts Warn of Execution Gap
Published on 05/14/2026 at 15:12 | Redaktion boerse-global.de
The disconnect between Rheinmetall’s operational strength and its share price has rarely been starker. The Dax-listed defence group this week saw its stock tumble to a 52-week low of €1,119.80, some 44% below the September 2025 peak, even as it unveiled a €3.4 billion Romanian contract for the Lynx KF41 infantry fighting vehicle and a fresh partnership with Deutsche Telekom to build a drone defence shield.
Rheinmetall and Telekom plan to develop a system protecting cities and critical infrastructure against drone attacks and sabotage. Under the deal, Rheinmetall will supply sensor technology, laser systems and interceptors, while Telekom provides mobile network infrastructure and digital applications — addressing the challenge that roughly 90% of drones currently communicate via conventional ISM radio frequencies, with a growing minority using mobile networks. The announcement came ahead of the AFCEA security trade fair in Bonn, while Rheinmetall was simultaneously showcasing the Lynx KF41 at the BSDA exhibition in Bucharest, which runs until May 15.
The Romanian procurement programme, valued at €3.4 billion, was selected by the defence ministry in late April. That contract adds to an already bulging order backlog that stood at roughly €73 billion at the end of the first quarter — sufficient to occupy the group’s production lines for vehicle systems, weapons and ammunition for years to come. Yet the market’s focus has shifted. Bernstein analyst Adrien Rabier, who nevertheless maintained an “outperform” rating, cut his price target from €2,050 to €1,900, citing deteriorating investor sentiment in the defence sector as money rotates away from conventional military hardware towards drone-related technologies.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The caution was echoed by JPMorgan, which staged a sharp reversal, slashing its price target from €2,130 to €1,500 and downgrading the stock from “overweight” to “neutral”. The bank noted that Rheinmetall had missed market expectations in four of the past six months, making downward estimate revisions more likely than upgrades. Other houses took a more nuanced view: Warburg Research raised its recommendation to “buy” with a target of €1,550, mwb research also upgraded to “buy” at €1,450, while Barclays stuck with “overweight” and a €2,125 target.
The scepticism partly stems from the first-quarter numbers. Revenue climbed 8% to €1.94 billion and operating profit rose 17%, but the top line fell short of elevated analyst consensus, while cash flow turned negative. The group also narrowly missed market expectations in the previous quarter, compounding worries about delivery momentum. Bernstein, however, argues the underlying demand remains intact as long as there is no sign of an early end to the Ukraine conflict — a view supported by the record order intake.
Shareholders will receive a dividend of €11.50 per share for the 2025 financial year, paid on May 15, up from €8.10 a year earlier — a clear signal of rising payout capacity that did little to arrest the stock’s slide. For the full 2026 year, management targets revenue in the range of €14.0 billion to €14.5 billion with an operating margin of around 19%. The relative strength index (RSI) of 91 points to extreme oversold territory, but whether that sets the stage for a rebound or more pain depends on delivery conversions from the backlog. The next major test comes on August 6, when second-quarter figures will reveal whether orders are translating into cash flow.
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