Rheinmetall Ignites Twin Production Drives as Stock Springs Back From Analyst Upgrade

Rheinmetall begins serial production of FV-014 loitering munitions at Neuss, forms joint venture with Destinus for 2,000km cruise missiles, as Citigroup upgrade lifts shares 4.7%.

The defence group is firing on two new fronts this week. Rheinmetall has launched serial manufacturing of its FV-014 loitering munition at its Neuss facility, while also moving forward with a long-range precision-strike joint venture alongside Dutch firm Destinus. The announcements, paired with a Citigroup upgrade, have snapped the stock out of a recent slump.

Neuss takes over drone assembly as Bundeswehr orders pile up

Production of the kamikaze drone, previously handled in Braunschweig, has shifted to Neuss to ramp up capacity. Germany’s armed forces have already ordered systems worth around €300 million, with a framework agreement in place for further call-offs. First deliveries are slated for next year. The move comes as Rheinmetall’s order backlog swells to a staggering €73 billion at the end of the first quarter.

Destinus venture targets cruise missile mass production

Alongside the drone ramp, Rheinmetall and Destinus are pushing their “RUTA Block 3” programme towards industrial-scale output. The newly formed Rheinmetall Destinus Strike Systems joint venture, in which Rheinmetall holds a 51% stake, will produce a precision-strike weapon with a range of up to 2,000 kilometres. The system uses a T220 turbojet engine and a 250-kilogram warhead. Design work is based in the Netherlands, components and testing are carried out in Ukraine, and final assembly will take place at Rheinmetall’s Unterlüß site in Germany. The partners aim to have the first missiles rolling off the line by the end of 2026, and they estimate the annual addressable market runs into billions of euros.

Citigroup turns buyer as analysts flag overdone sell-off

The dual production catalysts helped push Rheinmetall shares up 4.7% on Monday to €1,176.60, recovering from a 52-week low of €1,118 reached just days earlier. Citigroup analyst Charles Armitage upgraded the stock from Neutral to Buy, arguing that the near-45% drop from the record high of nearly €2,000 was excessive. “Russia remains a permanent threat to Europe even after a possible end to active hostilities in Ukraine,” Armitage wrote, citing structurally high defence demand. He trimmed the price target slightly to €1,408, still implying a 20% upside from current levels. Insiders, including executives and supervisory board members, have also been buying shares recently, signalling confidence from within.

Q1 cash flow shock still weighing on year-to-date returns

Despite Monday’s bounce, Rheinmetall is still nursing a roughly 26% loss since the start of 2026. The first-quarter earnings miss – driven by a negative free cash flow caused by high inventory build-up – spooked investors and triggered the slide from the record high. The stock’s relative strength index of 93 suggests short-term overbought conditions, meaning the rally could pause. Whether the shares can hold sustainably above the €1,100 mark will be key to breaking the immediate downtrend. For now, the combination of fresh production milestones, a supportive analyst call and a bulging order book is giving the battered stock some much-needed lift. In the sector, Rheinmetall led gains on the day, with Renk up 1.8%, Saab 2.0% after its own Citi upgrade, and Hensoldt and TKMS advancing less than 1% each.