German defense giant Rheinmetall is aggressively expanding its international footprint through two major joint ventures, even as its stock price struggles to reflect the fundamental strength of its overflowing order books. The company is pushing ahead with a missile alliance in Germany and a multi-billion euro vehicle partnership in Spain, signaling a period of significant strategic growth.
In Spain, Rheinmetall has signed a letter of intent with technology group Indra to form a formal joint venture later this year. The partnership aims to secure a massive order from the Spanish army for up to 3,000 military trucks and modernize armored vehicles, a project CEO Armin Papperger says holds multi-billion euro potential and will create hundreds of jobs. This move runs parallel to the even larger “Arminius” project with the German Bundeswehr for up to 3,000 GTK Boxer vehicles, which could translate to a volume of around 22 billion euros for Rheinmetall. A first contract for 1,800 vehicles is expected in the first half of 2026.
Simultaneously, the company is bolstering its missile business. Together with Dutch technology firm Destinus, Rheinmetall is founding the joint venture “Rheinmetall Destinus Strike Systems,” focused on cruise missiles and ballistic rocket artillery. The founding is planned for the second half of 2026. Rheinmetall will hold a 51% majority stake, with Destinus owning 49%. The operational site will be in Unterlüß, Germany, where approximately 35 million euros will be invested in new production facilities for a full operational start in 2027. Destinus contributes existing capacity, currently producing over 2,000 cruise missile systems annually, with the joint goal of significantly expanding European manufacturing to meet growing NATO and global demand.
Management estimates the new missile venture’s short-term market potential at several hundred million euros, with long-term sales potential growing into the low single-digit billions. This complements ongoing plans for cooperation with Lockheed Martin on ATACMS and Patriot production in Europe. These ventures are embedded in an annual revenue target of approximately 14.5 billion euros, representing growth of up to 45%.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Operationally, the company’s foundation appears rock-solid. A remarkable 91% of its targeted annual revenue is already secured by firm orders. However, this fundamental strength is starkly at odds with the stock’s recent performance. The share price recently fell 5.4% to 1,462.40 euros, breaching the closely watched 20-day moving average. The stock currently trades around 1,482 euros, roughly 25% below its 52-week high of nearly 1,995 euros. A so-called Death Cross pattern in December further burdened the broader technical picture.
Market observers attribute the recent pullback to profit-taking in the defense sector and a lofty valuation. With an expected price-to-earnings ratio of 43.7 for 2026, the stock trades at a massive premium to the sector average, pricing in ambitious growth. The coming weeks present critical tests. The company will present its first-quarter 2026 results on May 7, followed by its Annual General Meeting in Düsseldorf on May 12. Shareholders are set to receive a planned dividend of 11.50 euros per share, a 42% increase.
The upcoming quarterly figures must demonstrate that the targeted operating margin of around 19% on up to 14.5 billion euros in annual revenue is sustainable. Confirmation of this high profitability is seen as essential to justify the stock’s premium valuation and break the current technical downward pressure. The analyst consensus, based on 21 assessments, sets an average price target of 2,044 euros, implying a theoretical upside of about 40%.
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