Arminius Program Scale-Back and Mercedes Defense Signals Pile Pressure on Rheinmetall Stock

CEO buys €500k shares but Rheinmetall stock languishes near €1,118 support amid Berenberg downgrade on Boxer delay and auto competition.

The chief executive of Rheinmetall has put his own money on the line, purchasing roughly €500,000 of the company's shares on 7 and 8 May—a move that typically signals insider conviction. Yet the stock continues to languish near its 52-week low of €1,118.00, closing on Friday at €1,123.80, just 0.52% above that floor. The buying has so far failed to arrest a slide that has left the shares down nearly 30% since the start of 2026 and more than 40% below last September's peak.

Two distinct headwinds are weighing on the defence group. Berenberg, in a study dated 15 May, slashed its price target from €2,100 to €1,750 after cutting its volume estimate for the Bundeswehr's Boxer-Arminius programme from €32 billion to €23 billion. That reduction strikes at the heart of Rheinmetall's growth narrative, as the multi-variant vehicle project—with a potential total value of around €40 billion for up to 3,000 vehicles—could have contributed roughly €22 billion in revenues for the company alone. CEO Armin Papperger now expects a contract signature no earlier than the second half of the year, a delay from market hopes of a first- or second-quarter deal.

Meanwhile, a signal from the automotive industry is adding a second layer of uncertainty. Mercedes-Benz CEO Ola Källenius recently indicated his company is open to participating in defence production. While not a concrete threat to Rheinmetall's current order book, the remark shifts the narrative around capacity and competition. If industrial heavyweights from the auto sector redeploy facilities toward military goods, the premium valuation of established defence suppliers could face renewed scrutiny.

The technical picture has also deteriorated. A sell signal triggered on 13 May has reinforced the downward momentum, and the gap below key moving averages is widening. The share lost another 2.01% on Friday alone, bringing the weekly decline to 6.91%. The zone around €1,118—the worst level in 52 weeks—now acts as a critical support. A break below that would likely accelerate selling from systematic and short-term traders alike.

Analyst sentiment, however, has not uniformly turned bearish. Bernstein Research maintained its "Outperform" rating while lowering its price target to €1,900, signalling long-term conviction tempered by near-term caution. Warburg Research remains a buyer, and both Deutsche Bank and UBS have recently offered positive assessments. JPMorgan stays neutral. On the buy-side, the Georgi Vermögensverwaltungs GmbH added to its Rheinmetall stake, echoing the CEO's vote of confidence at lower levels.

Berenberg, despite its reduced assumptions, still sees the glass as half full. Roughly 62% of the revenue planned for 2027 is already covered by firm orders, according to the bank's model, suggesting that the current sell-off overstates the operational risk. Management itself holds to its 2026 outlook: revenue of €14 billion to €14.5 billion and an operating margin of 19%. Papperger has promised a significantly stronger second quarter, with around €20 billion in programme nominations expected—including a Lynx programme in Romania, a battle tank project in Italy, and the F126 frigate contract.

The company is also expanding its naval footprint. Following the acquisition of NVL, the new Naval Systems segment contributed €77 million in revenue in March alone, and Rheinmetall has submitted a non-binding offer for German Naval Yards Kiel. A scheduled corporate presentation in New York on 21 May could provide a platform to reset the narrative.

For the stock to stabilise, the immediate test is the €1,118 support line. If it holds, the combination of insider buying, a still-deep order book, and a clearer picture from the second quarter may allow the shares to find a floor. If it breaks, the wait for the Arminius contract—now pushed to the second half—could become even more fraught.