Rheinmetall CEO Buys €5M in Shares as ILA Berlin Show Tests the Narrative

Rheinmetall shares drop 25.68% YTD amid revenue miss; CEO buys €5M in stock. Analysts divided, but record €73B backlog supports long-term outlook.

Rheinmetall is rolling out a massive exhibit at the ILA Berlin air show this week, but the stock market is telling a different story. The defence group’s shares have dropped 25.68% since the start of the year, closing Wednesday at €1,190.20. On a weekly basis, the loss stands at 7.82%. Against that backdrop, the company’s prominent presence at the ILA — spanning 840 square metres from 10 to 14 June in Schönefeld — becomes more than a product showcase: it is a test of whether fresh order momentum can arrest the slide.

Chief executive Armin Papperger has decided to put his own money where his mouth is. Through his ATP Holding GmbH, he purchased shares worth roughly €5 million at an average price of €1,249.91 apiece. That price sits about 5% above the current share price of around €1,188, meaning the market has so far declined to follow his lead. Insider transactions of this size are typically read as a vote of confidence, though they do not substitute for operational progress.

That progress has been mixed. In the first quarter of 2026, Rheinmetall generated revenue of €1.938 billion, missing the consensus estimate of roughly €2.3 billion. Operating profit rose 17% to €224 million, lifting the margin to 11.6%. Management attributed the sales shortfall to strategic shifts of deliveries into the second quarter, insisting there were no structural issues. The full-year guidance remains unchanged: revenue between €14 billion and €14.5 billion with an operating margin of around 19%.

Analysts have responded warily. Citigroup’s David Perry cut his rating from Overweight to Neutral and slashed the price target from €2,130 to €1,500, citing a pattern of missed expectations in four of the past six months. He also flagged a “peak ammunition” risk — the idea that much of the anticipated defence demand is already priced in. Nonetheless, Citi subsequently upgraded the stock back to Buy after the recent decline. On the other side, UBS analyst Sven Weier kept his Buy recommendation but lowered his target from €2,200 to €1,600, pointing to concerns over near-term margin trends and cash conversion.

The overall analyst consensus is still largely constructive, with an average price target of €1,889 and 18 Buy recommendations. No Sell ratings are on record.

Underpinning the long-term case is a record order book of €73 billion, up 32% year-on-year and representing more than seven times 2025’s annual revenue. Papperger continues to target around €50 billion in sales by 2030. But the sheer size of the backlog only highlights the execution challenge: margins, cashflow and on-time deliveries now matter more than order intake.

A new competitive dynamic is emerging. The planned initial public offering of KNDS, the German-French armoured vehicle maker valued at €18 billion to €20 billion, is slated for June or July 2026. The German and French governments each hold 40% and plan to gradually reduce that to 30% apiece. That means a state-backed, publicly listed rival will soon operate directly in Rheinmetall’s core market. The IPO also risks sucking capital out of existing defence stocks as investors free up funds to subscribe, adding selling pressure on Rheinmetall, Renk and Hensoldt.

Technically, the stock looks fragile. The distance to the 200-day moving average is 26.80%, the relative strength index sits at 39.5, and 30-day annualised volatility has hit 53.40%. The share now trades 40.34% below its 52-week high and just 8.22% above its low.

At the ILA, Rheinmetall is trying to counter that narrative with concrete hardware. Central exhibits include the MQ-28 Ghost Bat — the company is positioning itself as the prime contractor for a potential Bundeswehr procurement aimed at 2029 — and the Rheinmetall ICEYE Space Solutions joint venture, which recently secured a billion-euro contract for satellite-based reconnaissance using SAR technology. Also on show: the Skyranger 30 air defence system mounted on a Boxer vehicle, the Caracal airborne platform, loitering munition FV-014 with a 100-kilometre range, and a model of the F-35 Lightning II centre fuselage segments that Rheinmetall builds in Weeze for Northrop Grumman.

Whether these projects translate into near-term share price support depends on visible order news and a clean operational delivery in the second quarter. Until then, the gap between a record backlog and a stock down 26% in 2025 will remain the central tension for investors.