Düsseldorf, May 7, 2026, 21:04 CEST
- Rheinmetall stock dropped 6.94% on Xetra after the company’s final first-quarter numbers landed, cementing what looks like a sluggish kickoff to 2026—even as profit ticked higher.
- Sales climbed 8% to €1.938 billion, with operating profit up 17% at €224 million; the defence group is sticking to its 2026 outlook.
- Chief Executive Armin Papperger expects a pickup in second-quarter sales and order intake, citing substantial naval and vehicle orders as drivers.
Shares of Rheinmetall AG slumped Thursday. The German defense giant posted first-quarter sales growth, but momentum lagged behind last year’s rapid climb. That has investors zeroing in on delayed deliveries and new naval contracts, wondering if they’ll be enough to hit the company’s far more ambitious full-year goal.
Rheinmetall stands out now as a barometer of Europe’s rearmament push. The company’s order book has swelled to €73 billion. Still, there’s a gap between orders and actual revenue: sales climbed 8% to €1.938 billion in the quarter, with operating profit up 17% at €224 million.
Rheinmetall stuck to its 2026 sales target of €14.0 billion to €14.5 billion, with an operating margin around 19%—that’s operating profit as a percentage of sales. Hitting those numbers will require the company to speed up contract conversion, boost factory throughput, and step up deliveries following a weaker first quarter.
Rheinmetall shares finished the session 6.94% lower at €1,341.60 on Xetra, landing at the bottom of the DAX. Hensoldt slipped 3.69%, while Renk dropped 5.48%.
Papperger said Rheinmetall built on its strong performance from the same quarter last year and is looking for “stronger growth in sales and order intake” in the second quarter, helped by big contracts in naval and vehicle divisions. He pointed to higher capacity utilization as a reason the group can keep pushing profitability higher. Rheinmetall
“Rheinmetall Nomination,” the group’s combined tally of traditional orders and new framework deals, dropped 55% to €4.9 billion. That compares with a strong quarter a year ago, when several multi-billion-euro orders came through. The backlog increased from €56 billion a year back, now factoring in €5.5 billion sourced from Naval Systems. Rheinmetall
Naval has taken center stage for Rheinmetall. The company wrapped up its NVL acquisition in the first quarter, and Naval Systems now stands as its own reporting segment. In March alone, the division posted €77 million in sales and logged €8 million in operating profit—just a month into consolidation.
Rheinmetall has jumped in with a non-binding bid for German Naval Yards Kiel, according to Reuters, putting it up against Thyssenkrupp Marine Systems (TKMS) for the asset. Papperger said the due diligence process—Rheinmetall is combing through the target’s books and operations—has begun and could set up a binding offer within weeks.
The delayed F126 frigate programme is also in play. Rheinmetall CEO Armin Papperger told reporters a deal to take over the project could be signed in the second quarter. Reuters noted his remarks seemed to back an earlier Financial Times report saying the company is eyeing roughly €12 billion. Germany’s defence ministry, for its part, said negotiations remain unfinished.
Analysts didn’t see the selloff as evidence of a fundamental flaw, but pointed their fingers at execution. For Goldman Sachs, Sam Burgess chalked up the disappointing revenue to timing, not a deeper structural weakness. Jefferies’ Chloe Lemarie highlighted soft naval performance, while Berenberg’s George McWhirter picked out air defence as the standout. That’s according to dpa-AFX/MarketScreener.
The risk is now out in the open. JPMorgan’s David H. Perry flagged plenty of upside, but he also pointed to more risk here compared to names like Hensoldt or Renk, citing order delays, according to dpa-AFX. Rheinmetall posted negative operating free cash flow—minus €285 million—as it stockpiled inventory and locked more cash into working capital ahead of its 2026 growth targets.
Investors now face a different question: not about Europe’s willingness to spend, but about Rheinmetall’s ability to push orders through its plants and shipyards in time to hit the 2026 forecast reaffirmed on Thursday.
