Rheinmetall is caught in a tug-of-war between a pipeline of multi-billion-euro contracts and a stock that has surrendered nearly half its value since September. The Düsseldorf-based defence group ended Monday’s session at €1,002.60, up a modest 0.97%, but the relief was short-lived. With the share price down 37.40% year-to-date and 46.40% over the past twelve months, the market is sending a clear message: order books alone no longer guarantee a rising share price.
A key factor behind the growing skittishness is the German government’s decision to scrap the multi-billion-euro F126 frigate programme — a project for which Rheinmetall had already incurred billions in costs. Berlin is pivoting to eight smaller MEKO A-200 frigates instead of six large vessels, a shift that caught the defence industry off guard and forced several analysts to trim their earnings forecasts. The cancellation has added a layer of execution risk that investors are now pricing into the stock alongside the broader sector repricing.
Against that backdrop, the operational news flow remains robust. A consortium involving Rheinmetall has secured a digitalisation contract for the British Army’s battle-training system, with the company’s share of the 15-year deal worth nearly €1 billion and implementation set for summer 2026. On the weapons side, Rheinmetall and Lockheed Martin have signed an agreement to co-produce ATACMS missiles in Germany at a new plant in Unterlüß from 2027, a move that expands the group’s portfolio into long-range precision munitions and reduces supply-chain dependencies. The announcement came on the sidelines of the NATO summit in Ankara, where alliance members pledged fresh procurement worth more than $50 billion.
Most visible on the ground is Rheinmetall’s new munitions factory in Baisogala, Lithuania. A joint venture with the Lithuanian state, it is described by President Gitanas Nausėda as the largest defence investment in the country’s history. Up to €300 million will be poured into the site, which is due to start producing tens of thousands of 155 mm artillery shells per year from 2026, reaching full capacity in 2027 and creating around 150 jobs. The expansion underscores Rheinmetall’s commitment to building out European production capacity even as the stock struggles to hold on to the €1,000 mark.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The technical picture offers little comfort. The share now trades just 11.09% above its 52-week low of €902.50, and the distance to the 200-day moving average has widened to -33.78%. The relative strength index sits at 38.5, flirting with oversold territory but not yet signalling a confirmed bottom. In the past 30 days alone, the stock has lost 16.21%, and the annualised volatility of 68.89% points to persistent sector-wide nervousness. The delayed IPO of KNDS is another reminder that the defence boom on public markets is cooling.
Yet analysts remain overwhelmingly bullish. Fourteen buy ratings stand against a single hold, with no sell recommendations in sight, and the consensus price target still sits well above current levels. That optimism is built on the multi-year revenue visibility that the British and Lithuanian contracts, together with the ATACMS partnership, provide. The broader backdrop of rising NATO budgets and Germany’s plans to take on new debt for military improvements also supports the thesis. The bull case argues that once the market looks past the F126 disappointment and the recent sector rotation, the order momentum will reassert itself.
The bear case, however, points to the risk of a deeper slide. A sustained break below €902.50 would open a zone with no clear support, potentially triggering a new wave of selling. Political headwinds are also mounting, with debates over how to finance higher defence spending threatening cuts elsewhere, and a possible NATO shift toward air defence, long-range weapons, and drones that could bypass some of Rheinmetall’s traditional land-system segments. Execution on the Lithuanian and ATACMS projects will be critical — any delays or margin pressure could quickly erode the premium the stock once commanded.
The next key test comes on August 6, when Rheinmetall publishes its second-quarter results. Investors will scrutinise the guidance for any lingering impact from the F126 cancellation and whether the ramp-up in new capacity is on track. In the near term, reclaiming the €1,100 level would break the seven-day downtrend that has cost the stock 11.74%, while a move above the 50-day moving average of €1,161.53 would signal that a genuine recovery is under way. Until then, the balance between new contracts and execution fears keeps Rheinmetall’s equity in a defensive position, with the €900 psychological mark acting as the final line of defence.
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