The clock is ticking in Bucharest. Rheinmetall has until 31 May to hammer out a renegotiated contract with the Romanian government under the EU’s SAFE programme, a €5.7 billion deal that has become the single biggest overhang on the defence group’s share price. The sticking point is a local-production quota of 40% that the company wants slashed, a demand Defence Minister Radu Miruță has branded as blackmail. Romania is already exploring alternative channels for the EU funds, and a breakdown in talks would leave a conspicuous hole in Rheinmetall’s order book just as it reaches new heights elsewhere.
The standoff comes at a time when the group’s operational engine is firing on all cylinders. Revenue climbed 8% in the first quarter to just over €1.9 billion, while operating profit jumped to €224 million. The order backlog swelled to a record €73 billion, bolstered by the integration of Lürssen’s naval division. Chief executive Armin Papperger is ploughing ahead with expansion plans: production of 155mm artillery shells is slated to reach 1.1 million rounds a year by 2027, and a new partnership with Deutsche Telekom targets the fast-growing drone-defence market. Management is guiding for 2026 revenue of between €14 billion and €14.5 billion.
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Yet none of that firepower has been enough to stop the stock’s relentless slide. The shares touched a 52-week low of €1,118 on Wednesday before closing Thursday at around €1,147. The year-to-date decline now stands at roughly 28% (or 29% by some measures), and the price is trading more than 30% below its 200-day moving average — a textbook signal of entrenched bearish momentum. Part of the recent pressure has been technical: the shares went ex-dividend on Monday, with the record payout of €11.50 per share landing in investors’ accounts today.
Analysts are turning more cautious. Bernstein Research has trimmed its price target from €2,050 to €1,900, citing subdued sentiment across the defence sector and a shift in the dynamics of the drone war in Ukraine. The broader consensus still sees fair value at nearly €1,989, but near-term catalysts are thin on the ground. The next major inflection point will come after the Romanian deadline passes, with half-year results due on 6 August. Until then, the market is waiting to see whether Papperger’s bullish annual forecast can survive a failed deal in Eastern Europe — and whether the stock can hold above its newly minted 52-week low.
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