Rheinmetall's €1 Billion Bundeswehr Order Fails to Halt 26% Stock Slide as Berlin Air Show Looms

Rheinmetall's €73B order book fails to lift shares as peace hopes, budget doubts weigh; stock down 26% YTD, eyes on ILA Berlin air show.

A €1.015 billion contract to supply more than 2,000 Transportfahrzeuge to the Bundeswehr landed on Rheinmetall's desk this week. The response from equity markets? Barely a ripple. The stock closed Friday at €1,190, down 0.42% on the day and nursing a 26% loss since the start of the year — a far cry from the triumphalism of its full order book.

That order book, however, is bursting. The group’s total backlog stands at €73 billion, with management targeting a surge to €135 billion by the end of 2026. A €5.7 billion Romanian package for Lynx infantry fighting vehicles, Skyranger air-defence systems, ammunition and naval vessels, due for delivery between 2028 and 2030, underlines the international scale of demand. Meanwhile, Rheinmetall is sharpening its corporate focus: the sale of the civilian Power Systems division to Munich-based AEQUITA for €350 million, expected to close in the fourth quarter of next year, completes the exit from automotive supply and leaves the group as a pure-play defence contractor.

That strategic clarity has done little to move the share price. On a one-month view the stock has fallen 17%, and it now sits just 8% above its 52-week low of €1,099.80 struck in May. The market’s anxiety has multiple roots: hopes for a peace settlement in Ukraine are weighing on the sector, doubts about the trajectory of European defence budgets persist, and some investors question whether the defence boom has already been fully priced in.

Analysts remain sharply divided on the valuation. Barclays sees Rheinmetall at €2,035 per share (Overweight), citing economies of scale in ammunition production. Berenberg follows at €1,750 (Buy), while JPMorgan takes a more cautious stance at €1,500 (Neutral). Citigroup, though reiterating a Buy, has trimmed its target to €1,408 to account for a higher share count, arguing that current market concerns are overblown.

All eyes now turn to the ILA Berlin air show, running from June 10 to 14, where Rheinmetall plans to showcase its next-generation capabilities. The autonomous combat aircraft MQ-28 Ghost Bat, space-based reconnaissance systems, loitering munitions and the Skyranger air-defence platform will all be on display. For the group, the event is an important test of its ability to sustain a leading position in unmanned systems — a technology shift that is central to the long-term operating margin target of around 19%.

On the charts, the picture is tense. Rheinmetall’s stock is trading 26% below its 200-day moving average, a clear sign of technical weakness. Should selling pressure resume, the year low of €1,099.80 is the last line of defence before a significant deterioration in the chart pattern. That would contradict the operational story — but for now, the market is voting with its feet. The ILA will need to deliver more than hardware if Rheinmetall is to convince investors that its record pipeline can finally translate into a rising share price.