Rheinmetall Inks Landmark ATACMS Pact as Börse Sends Stock Below €1,000

Rheinmetall signs landmark ATACMS production deal with Lockheed Martin, but shares tumble 38% YTD as investor concerns over earnings conversion and defence sector headwinds persist.

Rheinmetall has secured a deal to manufacture US long-range ATACMS missiles on German soil for the first time, yet the defence group’s share price continues to languish below the psychological €1,000 mark, underscoring the deep disconnect between operational wins and market sentiment.

The memorandum of understanding, signed on July 7 with Lockheed Martin at the NATO Summit Defense Industry Forum in Ankara, paves the way for joint production of the guided missiles at Rheinmetall’s Unterlüß facility from 2027. The plant will initially build rocket motors and guidance components before ramping up to full assembly later that year, with capacity targets hitting 600 to 800 units annually by 2029 to meet demand from European allies and Ukraine. The project forms part of NATO’s “Engine” initiative, designed to tighten industrial links across the alliance, and will see the missiles deployed along the eastern flank, including in the Baltics and Finland.

In a parallel push, Rheinmetall is teaming up with Airbus to bid for Germany’s planned military satellite network, a sovereign, high-security communication system modelled on Starlink. Both moves are direct responses to discussions at the Ankara summit, where strengthening Europe’s defence industry and shoring up supply chains took centre stage.

None of this has stopped the stock from sliding. Shares closed Friday at €993.00, shedding 1.90 percent on the day and extending weekly losses to 9.48 percent. The monthly decline stands at 16.96 percent, while the year-to-date drop is a punishing 38.00 percent. Over twelve months, Rheinmetall has surrendered 46.25 percent of its value. The current price sits more than 50 percent below the 52-week high of €1,995.00 touched in September last year, though it is only about 10 percent above the low of €902.50 reached in late June.

Technical indicators paint a bleak picture. The relative strength index of 37.2 signals a move into oversold territory, but the stock remains 15 percent beneath its 50-day moving average of €1,168.88 and a full 34.6 percent below the 200-day average of €1,518.21. The 30-day annualised volatility of 68.77 percent reflects extreme market nervousness.

Rheinmetall is far from alone in its misery. Along with peers Renk and Hensoldt, the three German defence names have collectively shed around €58 billion in market capitalisation. Analysts point to a shifting security landscape and a Jefferies note that questioned whether the sector’s old growth models still hold, fuelling the sell-off. At the heart of investor unease is the disconnect between record order books and the ability to convert those orders into actual earnings.

A concrete blow landed when the German defence ministry pulled the plug on the multi-billion-euro F126 frigate project, a move that could cost Rheinmetall up to €300 million in lost revenue and complicates the group’s marine ambitions. MWB Research promptly slashed its price target from €1,400 to €1,150. Meanwhile, domestic political headwinds are building: activists protested in Berlin-Wedding on Sunday against German arms exports, a dynamic that could complicate future approval processes.

The coming week will test whether the confirmed ATACMS licensing deal can serve as a catalyst for a floor. The operational fundamentals are solid, but the charts have yet to signal a reversal. Closing the gap between orders and profit delivery remains the single biggest hurdle for Rheinmetall’s battered equity.