Rheinmetall’s Production Juggernaut Meets a Stock Market That Refuses to Play Along

The disconnect between Rheinmetall’s operational momentum and its share price has rarely been starker. On Friday, the defence group’s stock slumped to a new 52-week low of €1,341.20, shedding nearly five percent in a single session and leaving it down roughly 16 percent since the start of the year. Yet behind that grim chart lies a company firing on all cylinders — from a €300 million loitering munition order to the serial production launch of an unmanned naval vessel.

A €300 Million Bet on Precision Drone Warfare

Germany’s armed forces have placed a substantial order with Rheinmetall for loitering munition systems, valued at around €300 million. Deliveries are scheduled to begin in the first half of 2027. The contract underscores a broader shift in the group’s portfolio away from conventional hardware toward unmanned precision systems — a trend analysts see as a margin driver as NATO allies ramp up demand for such capabilities.

The order follows a pattern of aggressive expansion. CEO Armin Papperger, speaking at the Hannover Messe, revealed that artillery munition production has been ramped up more than tenfold since Russia’s full-scale invasion of Ukraine. Some of those contracts were sealed with a handshake, with formal paperwork arriving only later — a testament to the urgency driving the industry.

From Handshakes to Hulls: Maritime Ambitions Take Shape

Rheinmetall’s push into new domains gathered pace on April 20, when serial production of the Kraken K3 Scout drone boat began at the Blohm+Voss shipyard in Hamburg. The yard belongs to NVL, the marine group Rheinmetall acquired at the start of March, marking its first direct foray into military shipbuilding. Initial plans call for around 200 units annually, with capacity potentially scaling to 1,000 boats per year.

The 8.5-metre vessel, capable of 55 knots and a 600-kilogram payload, can operate autonomously for 30 days while maintaining a permanent Starlink connection. It represents a bet on unmanned maritime systems that mirrors the group’s push into loitering munition on land.

Should investors sell immediately? Or is it worth buying Rheinmetall?

The Numbers Tell Two Different Stories

While the share price has fallen more than 30 percent from its September 2025 high of €1,995, the underlying business metrics paint a far more bullish picture. Management expects group revenue of between €14.0 billion and €14.5 billion for 2026 — and 91 percent of that target is already covered by existing orders. Analysts project earnings per share of €39.61 on average, representing a roughly 166 percent jump from 2025 levels.

Jefferies has responded to the recent order flow by lifting its price target from €2,020 to €2,220, maintaining a “Buy” rating. The broader analyst consensus sits at around €2,102 — implying significant upside from current levels. On the personnel front, the group receives some 350,000 applications annually, a reflection of the talent needed to hit those revenue targets.

A Stock in Search of a Floor

The technical picture offers little comfort. Support at €1,400 failed to hold, and the next relevant zone lies between €1,310 and €1,320. On the upside, initial resistance stands at €1,450 and €1,500. The Pentagon’s new defence budget, which sets fresh investment benchmarks, could provide a catalyst when markets begin pricing it in on Monday — Rheinmetall has been pushing deeper into the US market and maintains partnerships there.

To cushion supply chain risks, the group is holding critical goods worth roughly €8 billion, a deliberate strain on cash flow and working capital. Papperger expressed confidence that rising volumes from Germany and other European buyers would push unit costs lower, noting that artillery munition prices are already showing signs of decline.

What Could Change the Narrative

Two key dates loom. On May 7, Rheinmetall releases its first-quarter results, followed by the annual general meeting on May 12. Order intake and margin trends will be under close scrutiny to determine whether the operational strength is translating into the numbers. For now, the market remains sceptical — but with a record order book, expanding production capacity, and a fresh push into naval systems, the ingredients for a reversal are all in place. The question is whether investors are ready to buy the story.