FRANKFURT, May 8, 2026, 11:10 CEST
Rheinmetall slipped under the 1,300 euro mark on Friday, hitting prices last seen in April 2025. The drop followed JPMorgan’s downgrade of the German defence firm, compounding Thursday’s slide that left the stock at the bottom of the DAX. Shares were off another 5%, extending losses, with Reuters also noting Rheinmetall’s 5% fall after the rating cut.
This decline cuts into one of Europe’s marquee defence names, right as questions surface over how quickly all those record orders will actually show up as revenue. Germany is committing 145 billion euros to military spending next year, feeding into a massive 780 billion euro package running to 2030. Still, after two years of strength, the sector’s momentum has eased.
Rheinmetall posted a 7.7% jump in first-quarter sales, reaching 1.94 billion euros—falling short of analyst expectations referenced by Reuters. Operating profit climbed to 224 million euros, up from 191 million euros. The operating margin landed at 11.6%, marking an improvement.
JPMorgan’s David Perry lowered his price target on the stock to 1,500 euros—down from 2,130—and shifted his rating to “Neutral” after previously calling it “Overweight”. He still sees long-term growth stemming from German defense outlays, but warns the shares are up against some short-term obstacles. MarketScreener
Execution is the sticking point. Perry noted Rheinmetall has fallen short of market targets in four out of the past six months, casting doubt on its ability to hit its own growth goals. He flagged that cuts to earnings estimates seem more probable than any upgrades now. His outlook? Forecasts trimmed by up to 5% through 2030.
Bernstein Research is sticking with its “Outperform” call and a 2,050 euro price target. Still, analyst Adrien Rabier says growth now has to deliver. Rabier flagged that Rheinmetall’s hefty backlog needs to move onto the books as real sales, and the company should land more big-ticket deals in core defence hardware to soothe concerns about changing warfare trends. Finanznachrichten
Rheinmetall stuck to its 2026 outlook, holding firm on sales projections of 14.0 billion to 14.5 billion euros and keeping its targeted operating margin at roughly 19%. The company anticipates quicker growth in the second quarter. Chief Executive Armin Papperger called the group “well on course” for its yearly targets. Rheinmetall
Still, delays remain a drag on the stock. Rheinmetall reported operating free cash flow slumping by 527 million euros, landing at minus 285 million euros. The company pointed to higher inventories and more working capital locked in to back up its growth push. Nomination volume—which counts both orders and framework deals—tumbled 55% from the unusually strong quarter a year ago.
The order backlog is still hefty. Rheinmetall reported a jump to 73 billion euros at March’s close, with 5.5 billion euros coming from its recently added Naval Systems unit. In the first quarter, the company pointed to early production of military trucks—units built ahead of anticipated call-offs in coming periods.
Naval ambitions are taking on more weight. Rheinmetall has put in a non-binding bid for German Naval Yards Kiel, opening a contest with Thyssenkrupp Marine Systems. Papperger confirmed due diligence is underway. “We have set ourselves very ambitious goals in this area,” he said. Reuters
German defence stocks took a hit. Renk dropped over 3%, Hensoldt slid more than 1% during the session, and TKMS was also in the red on Friday, according to Finanzen.net.
Back in October, Rheinmetall’s stock touched 2,008 euros. Since then, the shares have tumbled more than a third—even as the sector remains buoyant. Now, the pressure’s on: can those loaded order books actually translate into output, deliveries, and revenue at the pace investors once bet on?
