The disconnect between Rheinmetall’s operational momentum and its stock price has rarely been starker. While the Düsseldorf-based defence contractor locks in billion-euro contracts and ramps up production of autonomous systems, its shares closed the week at €1,341.20 — a fresh 52-week low and a decline of roughly 11% in the span of just five trading days. The year-to-date loss now stands at about 16%.
The sell-off comes despite a flurry of positive developments. On April 22, Rheinmetall signed a framework agreement with the German armed forces for the FV-014 loitering munition system, a deal that could be worth up to €2.4 billion. An initial call-off worth around €300 million was booked immediately, covering approximately 2,500 units, with options for a five-figure total quantity.
On the maritime front, serial production of the Kraken K3 Scout — an unmanned surface vessel — has begun at the Blohm+Voss site in Hamburg. Initial annual capacity stands at 200 units, with scalability to 1,000. For the full year, management is targeting revenue growth of 40% to 45%, implying a sales corridor of €14 billion to €14.5 billion. The operating margin is expected to reach around 19%.
Yet the market remains unconvinced. The stock is trading exactly at its year-low, and the gap between analyst expectations and share price performance is widening. Jefferies recently lifted its price target to €2,220 and maintained a buy recommendation. The broader analyst consensus shows 15 buy ratings and zero sell recommendations — a striking divergence from the stock’s trajectory.
Two Key Dates in May Could Reset the Narrative
The next major test comes on May 7, when Rheinmetall publishes its first-quarter results. Analysts are forecasting a sharp earnings jump, with an average estimate of €39.61 per share — more than double the prior-year figure. The report will provide a hard data point on whether the company’s margin expansion plans are on track.
Five days later, the annual general meeting in Düsseldorf will see management propose a dividend of €11.50 per share, a 42% increase from the prior year and the fourth consecutive hike. The agenda also includes the election of two new supervisory board members to replace Klaus Draeger and Louise Öfverström, whose mandates are expiring.
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For the full year, the board continues to target a significant revenue leap and an operating margin of roughly 19%. The order book stood at nearly €64 billion at the end of last year, with nine-tenths of the targeted annual revenue already secured through existing contracts.
The Supply Chain Paradox
China’s tightening grip on critical raw materials adds a layer of complexity. Beijing controls roughly 90% of global rare earth processing and dominates tungsten and antimony markets. New export controls have sent prices for some materials up sixfold, while approval rates for European companies seeking export licences have fallen below 25%. Over 80% of European defence firms depend on Chinese supply chains for critical minerals, and building alternative sources is estimated to take 20 to 30 years.
Rheinmetall has responded by stockpiling critical goods worth several billion euros. This strategy weighs on short-term cash flow but is designed to insulate production from global supply bottlenecks. CEO Armin Papperger has made supply security a top priority, a stance that carries increasing weight as geopolitical tensions drive both demand and disruption.
Where the Stock Could Go From Here
Technically, the share price is testing a support line around €1,340. A convincing Q1 report with strong margins could halt the downward trend and trigger a rebound. A miss, however, risks a sustained break below this key level.
The broader defence sector is grappling with a paradox: record order books and surging demand on one side, and supply chain risks, margin pressure, and investor scepticism on the other. Rheinmetall’s upcoming earnings will show whether the company can convert its unprecedented order backlog into profitable growth — or whether the gap between operational reality and market perception will widen further.
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