Insider Buying Meets Market Rout: Rheinmetall’s Cruise Missile Push Can’t Stem the Sell-Off

Rheinmetall CEO buys €500k shares, but stock hits 12-month low after Q1 revenue miss. Analysts divided; new cruise missile JV and dividend hike signal long-term focus.

Rheinmetall’s top brass are putting their money where their mouth is. Chief executive Armin Papperger bought shares worth around €500,000 on 7 and 8 May, followed by a €63,000 purchase from Dr Jutta Roosen-Grillo, a person close to the supervisory board, at an average price of €1,253 a pop. Yet the stock continues to slide, closing Monday at €1,175.60 — down 2.62% on the day and a fresh 12-month low. Since the start of the year, the Dax-listed defence heavyweight has shed roughly 27% of its value, now trading 41% below its all-time high.

The market’s pessimism stems from a first-quarter revenue miss. Sales came in at €1.94bn, well short of analyst expectations of around €2.3bn. Management blamed delayed deliveries of military trucks and a slow ramp-up at the Spanish munitions plant in Murcia. Still, earnings per share from continuing operations climbed to €2.42 from €1.92 a year earlier, and operating profit rose 17%. Management reaffirmed its full-year guidance of roughly €10bn in group revenue and an operating margin close to 19%. The order backlog stands at a hefty €73bn.

None of this has stopped a string of analyst revisions. JPMorgan’s David Perry cut his rating from Outperform and lowered the price target to €1,500, citing rising execution risk from the company’s expanding web of partnerships and trimmed profit estimates by up to 5% through 2030. Warburg Research, however, upgraded the stock from Hold to Buy on Monday, slashing its target from €1,700 to €1,550 but arguing the sell-off is overdone. Bernstein warned that any serious progress in Ukraine peace talks would hit Rheinmetall disproportionately hard given its heavy exposure to land systems. UBS remains the most bullish, keeping a Buy with a €2,200 target.

Undeterred, Rheinmetall is pressing ahead with new ventures. Together with Dutch partner Destinus, it has formed a joint venture to manufacture cruise missiles dubbed Ruta 2 at its Unterlüß plant. Production is slated to start this year, with the venture officially launching in the second half of 2026. Rheinmetall holds a 51% stake. The missile has a range of 700 kilometres and a payload of 250 kilograms. The company also unveiled a drone-shield project with Deutsche Telekom to protect critical infrastructure, announced on Monday.

Investors will get a chance to quiz management at Tuesday’s annual general meeting. On the docket is a proposed dividend of €11.50 per share, up from €8.10 last year. Whether the weak Q1 numbers and the relentless share slide sour the mood remains to be seen. For now, the message from the boardroom is clear: the long-term story — from cruise missiles to drone defences and a record order book — outweighs the short-term turbulence. The market, so far, isn’t buying it.