Rheinmetall’s €1.94bn Revenue Miss and JPMorgan Downgrade Trigger a 52-Week Low

Rheinmetall stock hits 52-week low after Q1 revenue miss and J.P. Morgan downgrade, despite €73bn backlog and CEO share purchase.

Rheinmetall has endured a punishing week, with its shares slumping to a 52-week trough of €1,207.20. The stock has now shed roughly 40% from its September 2025 all-time high of €1,995 and has lost nearly a quarter of its value since the start of the year. The catalyst was a one-two punch: a first-quarter revenue shortfall and an immediate downgrade from a key Wall Street analyst.

A Revenue Gap That Spooked the Market

The trouble began on 7 May when the defence group posted first-quarter 2026 sales of €1.938bn. While that represented a 7.7% year-on-year increase, it fell well short of the €2.3bn that analysts had pencilled in. The operating result, however, was a brighter spot: earnings climbed 17% to €224m, pushing the margin to 11.6%. But the absolute revenue miss was enough to rattle investors.

J.P. Morgan’s David Perry wasted no time. On 8 May, he slashed his price target from €2,130 to €1,500 and downgraded the stock from “Overweight” to “Neutral”. The move intensified selling pressure, and the shares closed Friday down more than 10% in a single session.

Not all analysts are turning bearish. Berenberg Bank reaffirmed its “Buy” rating, while Banco Santander upgraded the stock to “Outperform” with a €1,735 price target. Citi, by contrast, stuck with “Hold” and a €1,480 target, flagging political risks around defence spending.

A €73bn Backlog and a CEO’s Vote of Confidence

Despite the near-term turbulence, Rheinmetall’s order book remains formidable. The backlog has swelled to roughly €73bn, up from €56bn a year earlier, and now includes €5.5bn from the newly created Naval Systems segment. Management is holding firm on its full-year guidance: revenue growth of 40% to 45% and an operating margin of around 19%, implying annual sales of €14.0bn to €14.5bn. The order coverage stands at about 97% of that target.

CEO Armin Papperger has sought to signal confidence in the company’s trajectory. On 7 May, he purchased shares worth approximately €506,000 at €1,405.00 apiece — a gesture that market watchers interpret as a personal bet on the turnaround. Papperger has also promised a “significant acceleration” in the second quarter, pointing to large-ticket orders in the naval and vehicle segments.

Naval Ambitions Take Centre Stage

The acquisition of NVL in the first quarter has given Rheinmetall a full-spectrum maritime capability, covering everything from unmanned systems to frigates. The Naval Systems unit contributed €77m in revenue during March alone, its first month within the group structure. But the ambitions go further. The company has submitted a non-binding offer for German Naval Yards Kiel and is conducting a technical review of the F126 frigate programme. There, NVL could replace Dutch shipbuilder Damen, which has fallen behind schedule. Germany’s defence ministry has confirmed that talks are ongoing.

The Annual Meeting as a Pivotal Moment

All eyes are now on the virtual annual general meeting scheduled for 12 May. The agenda includes a proposed dividend of €11.50 per share for the 2025 financial year, with the ex-dividend date set for 13 May and payment due on 15 May. The meeting also gives management a platform to reiterate its guidance and address investor concerns head-on.

Whether the AGM and Papperger’s second-quarter outlook can restore market confidence remains an open question. The next major test will come this summer with the half-year results, but near-term triggers — such as the confirmation or delay of large naval contracts — could shift sentiment sooner. For now, Rheinmetall is navigating a storm that its €73bn order book alone cannot calm.