Rheinmetall Faces Two Fronts: Analysts Split on Softened Targets as Germany's Left Pushes 50% Excess-Profit Levy
Published on 11/10/2026 at 16:02 | Editorial boerse-global.de
Rheinmetall shareholders are digesting a pair of developments that pull in opposite directions — one rooted in the company's own revised guidance, the other in a political proposal that could reach deep into its after-tax earnings. The stock continued its recovery on Wednesday, climbing 2.2%, as investors weighed fresh analyst moves against a legislative threat that remains, for now, only a draft.
A Split Verdict From the Research Houses
MWB Research upgraded the shares from "Hold" to "Buy" yesterday while keeping its price target at EUR 1,050, arguing that the correction to both the annual forecast and the company's long-term ambitions is largely priced in. Berenberg took the opposite tack, cutting its target from EUR 1,020 to EUR 900 and reaffirming its "Hold" rating. Analyst George McWhirter pointed to execution risks and uncertainty over demand as the basis for his caution.
McWhirter also expects Rheinmetall to revise its 2030 revenue target at the upcoming capital markets day. According to dpa-AFX, the prospect of more realistic long-term goals — combined with that event — could underpin the stock's rebound.
What Prompted the Reset
The backdrop is a guidance cut issued roughly a week ago, when Rheinmetall lowered its 2026 revenue forecast to around EUR 13.2 billion and trimmed its expected operating margin to approximately 18.5%. Management cited delays on the Bundeswehr's Arminius project and on lot awards for artillery ammunition.
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On the operational side, the company confirmed yesterday a Belgian order for 20 Skyranger 30 systems. The procurement package, logistics included, carries a value in the mid-three-digit millions of euros, with deliveries scheduled to begin at the end of 2028.
The Left's Tax Offensive
Running parallel to these corporate developments is a political initiative. Die Linke yesterday proposed an excess-profit tax on defence contractors, a move that would hit Rheinmetall's bottom line should the Bundestag adopt it. The party's draft sets an additional 50% levy on excess profits, targeting defence companies with a revenue margin above 5% and annual sales of at least EUR 1 billion.
The charge would sit on top of corporate and trade tax, and the draft contains no sunset clause. For investors, that makes the duration of any potential burden as relevant as its size — assuming the proposal becomes law. According to taz, Die Linke calculates the total tax load on excess profits, including existing taxes, at 72–86%, a range describing the party's own arithmetic for the most heavily taxed portion of earnings.
Rheinmetall as the Test Case
The party has put a number on Rheinmetall specifically. As reported by nd, Die Linke estimates potential revenue from such a tax at EUR 538 million for 2025, when the company's revenue margin stood at 15.82%. That figure remains an estimate of possible tax receipts, and any actual hit to shareholders would depend on whether the eventual statutory assessment base matches the party's calculation.
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The political rationale extends beyond individual corporate profits. Taz cites a University of Mannheim study from June 2025 finding that, under conditions of weak competition, additional defence spending tends to raise prices rather than output. The debate therefore touches on how much of a boost public spending actually delivers to corporate earnings — a political risk for Rheinmetall if the proposed levy gathers parliamentary support.
The Calendar Ahead
Parliamentary deliberation is scheduled for early 2027. Until then, attention focuses on the intended scope, the profit threshold and the size of the additional charge. The high margin would bring Rheinmetall within the proposed criteria; a concrete burden, however, would arise only if a binding rule is enacted.
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