Rheinmetall Gains a €1bn Bundeswehr Order but Loses a Takeover Target as Shares Slump

Despite a €1 billion Bundeswehr contract and €73 billion record backlog, Rheinmetall shares trade near yearly lows after KNDS acquisition collapse. Insider buying hints at recovery.

Operational successes and a blocked strategic move are pulling Rheinmetall in opposing directions. The defence group secured a €1 billion truck order from the German military on Monday, yet its shares continue to trade near their yearly lows. The stock closed at €1,178.20, having edged up to €1,185.60 earlier in the session, leaving it roughly 26% lower since January.

The Bundeswehr contract covers more than 2,000 logistics vehicles, with deliveries due to start in the first half of 2026. The deal provides a clear near-term revenue cushion for management, which is already sitting on a record order book worth €73 billion. The challenge now is converting that backlog into cash flow fast enough to restore investor confidence.

That confidence took another hit with the collapse of a potential acquisition that had been rumoured for months. Berlin and Paris have agreed to retain joint control of tank maker KNDS, each taking 40%, while the remaining fifth will be floated in a dual listing in Frankfurt and Paris. KNDS, which generated €4.4 billion in revenue last year, is expected to be valued at between €15 billion and €18 billion at IPO.

Rheinmetall had been considered a candidate to buy the German half of KNDS, but KNDS chief executive Jean-Paul Alary ruled out the idea, citing a lack of strategic fit. KNDS wants to stay focused on land systems, while Rheinmetall pursues a broader diversification. The rejection means Rheinmetall not only loses a takeout opportunity but also gains a publicly traded rival, giving investors a direct yardstick for margins and backlogs in the sector.

Nevertheless, the two companies still collaborate on a next-generation Franco-German battle tank alongside Thales, a project that has been pushed back to 2040. On an operational level, Rheinmetall is also expanding beyond defence. Its Pierburg subsidiary recently showed a new 22-kW charging kerb for fleet operators of delivery vans at a Munich trade fair.

Insiders are betting on a recovery at current depressed levels. Armin Papperger, Rheinmetall’s chief executive, used a company linked to him to buy around €4 million worth of shares in early June. Analysts at Oddo BHF see the pullback as an entry point too, setting a price target of €1,670.

The shares now trade just above the year’s trough of roughly €1,100, more than 40% below the September 2024 record of €1,995. A sustained move higher would need to break the critical trend line near €1,277, a level that looks achievable if the €73 billion order pipeline starts translating into cash.