As the ILA Berlin air show opens its doors on June 10, Rheinmetall will be rolling out the Skyranger 30 and the MQ-28 Ghost Bat, hoping to dazzle defence buyers. Yet for all the hardware on display and a bulging order book, the Düsseldorf-based company’s shares continue to lose altitude, closing Thursday at €1,200 – a far cry from the 52-week high of €1,995 touched last September.
The disconnect between operational momentum and market sentiment stems from a profound strategic overhaul now reaching its final stages. The group is shedding its civilian skin, doubling down on military contracts, and making a high-stakes bet on Eastern Europe.
Romania places the biggest single order in company history
The centrepiece of the new strategy is a €5.7 billion contract from Romania, signed in late May and disclosed on June 2. The package covers 298 Lynx infantry fighting vehicles in multiple configurations – troop carriers, mortar carriers, command posts and medical evacuation variants – along with Skyranger air-defence systems mounted on the same Lynx platform. Medium-calibre ammunition and four naval vessels (two offshore patrol boats and two diver-support ships) round out the order.
Deliveries are scheduled between 2028 and 2030. Funding comes from the EU’s Security Action for Europe (SAFE) programme, and Rheinmetall has committed to a technology transfer that will anchor a large share of the value creation in Romania itself.
A clean break with the civil past
Three days after the Romanian announcement, Rheinmetall signed the sale of its Power Systems division to the Munich-based industrial group AEQUITA. The preliminary price tag is €350 million, with the deal expected to close in the fourth quarter of 2026, subject to regulatory approvals. The unit, which generated roughly €2 billion in revenue in 2025, had already been classified as a discontinued operation since the fourth quarter of last year.
The sale affects approximately 6,200 employees. Three sites plus the Neuss factory will initially remain within the Rheinmetall orbit, with Neuss slated for conversion to satellite production. The group expects writedowns of about €200 million linked to the divestiture.
The move leaves the company with some 34,000 staff concentrated almost entirely in the defence segment, which turned over roughly €10 billion in 2025. CEO Armin Papperger is thus executing the sharpest realignment in the company’s modern history, funnelling capital, management attention and factory floor space into politically supported military demand.
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Transatlantic expansion and new alliances
Beyond Europe, Rheinmetall is also investing in its American footprint. The US subsidiary, American Rheinmetall, has announced $41 million in capital spending to expand plants in Michigan, Ohio and Maine.
Meanwhile, a partnership with Boeing positions the group as system manager for the MQ-28 Ghost Bat unmanned aircraft in Germany, and together with KNDS, American Rheinmetall has been nominated for the US Army’s Mobile Tactical Cannon programme, fielding the RCH 155 wheeled howitzer. Back in Germany, the Bundeswehr has placed an order for more than 2,000 military trucks worth over €1 billion.
Service contracts and consolidation as hidden levers
Yet even as the order pipeline swells, operational headwinds persist. A condition report dated June 4 found that only about 50% of the Bundeswehr’s Panzerhaubitze 2000 self-propelled howitzers and its Marder and Boxer infantry fighting vehicles were combat-ready, owing to spare-parts shortages and planning deficits at the defence ministry. That shortfall, however, could become a fresh revenue stream for Rheinmetall: maintenance, spare parts and modernisation work represent recurring income that the company is well-positioned to capture as existing systems need to be returned to full availability.
The defence landscape may also offer inorganic growth. Industry chatter points to a potential sale of Iveco’s defence arm, with Rheinmetall, alongside Leonardo and KNDS, touted as a possible buyer.
The stock: punished for the transformation cost
Despite the pile-up of headline orders, the equity has taken a beating. Thursday’s close of €1,200 marked a 7.09% drop over seven days and a 16.32% plunge over 30 days. Year-to-date, the stock has lost more than a quarter of its value, and it now sits 41% below that September 2025 peak.
Investors appear to be weighing the implementation costs of the restructuring, the writedowns, and the time lag between contract signing and revenue recognition against the defence backlog’s sheer size. The closing of the Power Systems sale in the fourth quarter of 2026 will be a hard milestone. Until then, the market will judge Rheinmetall by how swiftly it translates new orders into deliveries, operational reliability and service income – a test the ILA Berlin show this week will only begin to address.
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