Rheinmetall’s Record Pipeline Meets a Cold Market as Management Takes Its Case Abroad
Published on 05/21/2026 at 07:31 | Redaktion boerse-global.de
Rheinmetall’s management finds itself in an awkward spot this week. The defence group boasts an order backlog of €73bn – a towering figure that would make most industrialists envious – yet its stock has lost nearly a quarter of its value since the start of the year. The disconnect took centre stage on Thursday as executives fanned out for investor meetings at the Berenberg European Conference in New York and the Barclays European Leadership Conference in London.
The back-to-back roadshows come just days after Rheinmetall published first?quarter figures that fell short of expectations. Revenue climbed to €1.94bn, an eight percent increase year?on?year, but analysts had been looking for roughly €2.3bn. The shortfall was blamed on delivery delays for military trucks and ammunition, compounded by an accident at the company’s plant in Murcia, Spain. Despite the miss, the operating margin improved to 11.6 percent from 11.1 percent a year earlier, with operating profit reaching €224m.
Barclays is standing firm. Analyst Afonso Osorio reiterated his “Overweight” rating and a price target of €2,035, implying a gain of more than 60 percent from Wednesday’s close of €1,237. The bank sees the structural growth story as intact and expects a strong second quarter to make up for the soft start. For the full year, Barclays forecasts a 45 percent jump in profit – more than double the sector average of 19 percent.
Should investors sell immediately? Or is it worth buying Rheinmetall?
To fund its expansion, Rheinmetall is returning to the public bond market for the first time since 2010. It plans to issue an unsecured €500m bond, a move that underscores management’s confidence in its ability to convert the record order book into cash. Investors, however, remain cautious: the stock is still down 22.76 percent year to date, and the relative strength index of 87.8 suggests the recent bounce – a weekly gain of 7.87 percent – has pushed the shares into deeply overbought territory.
Beyond the financial engineering, Rheinmetall is broadening its technological footprint. The group intends to start producing cruise missiles, moving beyond its traditional land? and air?systems base. Its maritime division is also gaining heft: the integration of Naval Systems was completed in the first quarter, and the acquisition of Naval Vessels Lürssen added roughly €5.5bn to the order book, covering everything from unmanned underwater vehicles to frigates. Separately, a cooperation with Deutsche Telekom on drone defence targets both military and civilian critical infrastructure, opening up a politically sensitive new market.
The near?term focus, however, is execution. Management maintains its full?year guidance and expects growth to accelerate from the second quarter. With a €20bn?plus order pipeline for the second half and a supportive sector backdrop – including plans for a state entry into tank?maker KNDS – the pieces are in place. Whether the stock can close the gap between a depressed valuation and a record backlog now depends on Rheinmetall’s ability to turn paper orders into steel on the factory floor.
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