The gap between strategic ambition and investor sentiment has rarely been wider at Rheinmetall. While CEO Armin Papperger outlined plans to launch serial production of loitering munitions and strengthened the company’s naval ambitions on the same day shareholders convened virtually, the stock tumbled to a fresh 52-week low.
Shares touched €1,155.60 during Tuesday’s session before closing at €1,162.40, a decline of 1.82% that brought the weekly loss to 18.74%. Year to date, the equity has surrendered roughly 28%, leaving it some 30% below its 200-day moving average.
Drone production kicks off in Neuss
Rheinmetall has started manufacturing the FV-014, a loitering munition designed for both reconnaissance and direct attack, at its Neuss facility. The system — developed in just a few months — can fly for up to 70 minutes, reach a range of around 100 kilometres, and carries a four-kilogram warhead. Component sourcing is kept within the European Union, drawing on suppliers in Germany and Italy.
The Neuss line supplements existing operations in Braunschweig, a site Rheinmetall acquired in 2025 via the takeover of Leichtwerk AG. The Bundeswehr provides the anchor customer: a framework contract valued in the billions, with an initial call-off worth approximately €300 million. Deliveries to the armed forces are slated for the first half of 2027, following a qualification phase due to begin in the second quarter of 2026.
Naval Systems takes shape
Papperger used the annual meeting to highlight progress in the maritime domain. The newly created Naval Systems division, formed through the acquisition of Lürssen’s marine business, starts with an order backlog of €5.5 billion. Beyond that, Rheinmetall has submitted a non-binding offer for German Naval Yards in Kiel and is competing with Thyssenkrupp Marine Systems for the shipbuilder. A due-diligence review is under way, and a binding offer is expected shortly.
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The company is also branching into drone defence. Together with Deutsche Telekom, it is developing a system that uses mobile network data to detect and neutralise spy drones over critical infrastructure, combining jamming technology, interceptor drones and laser components.
Insider buying and a record dividend
One board member saw the sell-off as a buying opportunity. René Gansauge purchased shares worth €246,228.80 on Tuesday at a weighted average price of €1,172.52 each.
On the payout front, management has proposed a dividend of €11.50 per share for the past financial year, an increase of nearly 42% from the prior year. Papperger also reaffirmed the full-year targets: revenue of up to €14.5 billion and an operating margin of 19%, with a marked acceleration expected in the current second quarter.
Analyst verdicts diverge
The mixed outlook is reflected in analyst ratings. JPMorgan downgraded the stock to “Neutral” with a price target of €1,500, citing execution risks during the group’s transformation. MWB Research, by contrast, upgraded to “Buy” and kept its target at €1,450. UBS remains bullish, setting a target of €2,200 and arguing that the first-quarter revenue miss was a clearing event. Across 21 analysts, the consensus price target stands at €1,997.86 — implying more than 60% upside from current levels.
For now, the market is demanding proof. The qualification of the FV-014 next year and the delivery of the promised second-quarter acceleration will be the near-term tests that determine whether Papperger’s vision can finally close the gulf between operational reality and stock price.
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