Rheinmetall’s €1 Billion Order and Oversubscribed Bond Mask a Stock Still Nursing Deep Wounds

Despite €1B Bundeswehr order and oversubscribed bond, Rheinmetall shares trade 35% below 52-week high; Deutsche Bank sees 63% upside.

Rheinmetall has delivered two powerful signals to the market in quick succession — a €1.015 billion Bundeswehr vehicle order and a €500 million bond that was 7.8 times oversubscribed. Yet the share price, while bouncing from recent lows, remains more than 35% below its 52-week high of €1,995. At €1,292.40, the stock has shed nearly 20% since the start of the year, a decline that stands in stark contrast to the flurry of positive corporate developments.

The bond, placed on 28 May with a coupon of 3.375% and a maturity to May 2031, was met with such strong demand that the order book swelled to 7.8 times the issue size. Finance chief Klaus Neumann called the reception a confirmation of the market’s faith in Rheinmetall’s operational momentum and growth strategy. Proceeds will be used for general corporate purposes, including refinancing upcoming maturities.

Days earlier, the Bundeswehr triggered a framework agreement from 2024 covering up to 6,500 unprotected transport vehicles. The first call-off — for 2,000 units across 4x4, 6x6 and 8x8 variants — is worth roughly €1.015 billion gross. Production falls to the Rheinmetall MAN Military Vehicles subsidiary, with initial deliveries expected in the first half of 2026 and the bulk by year-end. The order will be booked as incoming in the second quarter.

On the bourse, the stock reacted positively, rising 4.16% on Thursday to lead the DAX. By Friday morning it briefly touched €1,295.60 before easing. The rebound, however, does little to erase the longer-term weakness: the shares are still trading well below the €2,000 peak reached 52 weeks ago.

That gap may narrow if Rheinmetall’s transatlantic push gains traction. The group’s American subsidiary has formed a partnership with Harbinger to develop autonomous ground vehicles (UGVs) for the Pentagon. Harbinger supplies the scalable hybrid platform; Rheinmetall integrates mission systems for both logistics and direct combat roles. First public demonstrations are slated for summer 2026, and analysts view autonomous systems as one of the fastest-growing segments in defence.

On the home front, capacity constraints are being tackled from multiple angles. Volkswagen’s works council chief Daniela Cavallo signalled openness to defence production at the Osnabrück plant — a logical extension given MAN (a VW subsidiary) already partners with Rheinmetall on military trucks. Separately, rival KNDS has expressed interest in taking over Mercedes-Benz’s Ludwigsfelde factory to expand production of the Boxer armoured vehicle, a programme in which Rheinmetall and KNDS collaborate closely. The Bundeswehr plans to acquire up to 3,000 Boxer units, so additional assembly lines could shorten delivery times and lower unit costs.

Deutsche Bank remains bullish, reiterating a buy rating with a price target of €2,100 — implying nearly 63% upside. Analysts anticipate an acceleration in revenue growth during the second quarter, building on a solid first quarter where sales rose 8% to €1.9 billion and operating profit improved 17% to €224 million.

Technically, the recent rally has pushed the relative strength index to 84, a level typically considered overbought. For the stock to sustain a meaningful recovery, the partnerships and order pipeline will need to translate into tangible earnings momentum — not just headlines.