Rheinmetall's €1.15B Howitzer Order and €14B Naval Bid Signal Firepower as Stock Struggles to Recover

Rheinmetall's share price plunges 43% from peak even as order backlog hits €73B, new contracts flow, and executives buy shares. Analysts see upside with €1,900 target.

The disconnect between Rheinmetall's booming order book and its flagging share price has rarely been starker. While the stock recently plumbed a 52-week low of around €1,144 — some 43% below last September's peak of nearly €2,000 — the Düsseldorf-based defence group continues to pile on fresh contracts across land, sea and air.

The British Army provided the latest jolt, placing a €1.15 billion order for 72 RCH 155 wheeled howitzers through the joint venture Artec. The system, capable of engaging targets while on the move, will be delivered to UK forces as part of London's artillery modernisation push. Hard on the heels of that deal, Rheinmetall revealed it had submitted a bid to Berlin to take over as prime contractor for Germany's troubled F126 frigate programme — a project worth up to €14 billion. The offer would see the company inherit the role from Dutch yard Damen, which has been grappling with software delays and schedule slippage. Rheinmetall's newly formed Naval Systems division, created after the March 2026 acquisition of Naval Vessels Lürssen, would manage the build, with a target delivery of the first vessel by the second half of 2031.

The company is also scaling its drone capabilities. A new series production line for the FV-014 loitering munition — known as a kamikaze drone — is being set up in Neuss, supplementing existing output in Braunschweig. A framework contract worth roughly €300 million with the Bundeswehr underpins the expansion, which aims to meet surging European demand and shorten supply chains. First deliveries from Neuss are expected next year.

Top management has been backing the stock with personal cash. Chief executive Armin Papperger bought Rheinmetall shares worth around half a million euros on 7 and 8 May, paying between €1,303 and €1,405. Board member René Gansauge followed suit on 12 May, acquiring shares for roughly €246,000. Market watchers often interpret such insider purchases as a vote of confidence in the company's near-term trajectory.

Shareholders are also getting a direct reward. At the annual general meeting, the board approved a dividend of €11.50 per share — a record payout and a sharp jump from the €8.10 distributed the previous year. The ex-dividend adjustment is already priced into the stock, with the cash due to reach investors on 15 May.

The fundamental picture remains robust. Rheinmetall's order backlog stood at roughly €73 billion at the close of the first quarter. Management expects revenue in the range of €14.0 to €14.5 billion for the current financial year, with an operating margin of around 19%. A pronounced acceleration in growth is anticipated from the second quarter of 2026, driven by the ramp-up of ammunition production in Spain and the delivery of previously deferred vehicle batches.

Bernstein Research maintains an "Outperform" rating on the stock with a price target of €1,900, arguing that structural demand for defence equipment remains intact. Yet the near-term picture is clouded by technical overextension. With a relative strength index of 91.3 and annualised volatility exceeding 55%, the shares are flashing warning signs. Whether the double dose of contract news — the howitzer order and the naval bid — can trigger a lasting recovery now depends on decisions in Berlin and the speed of execution in the field.