Rheinmetall’s €23bn Tank Ambition and Kamikaze Drone Pivot Battle a 27% Share Slide

Rheinmetall shares down 27% YTD near 52-week low, even as record €73bn backlog, new tank joint venture with Leonardo, and drone factory conversion signal operational momentum.

Despite a record order book and two major strategic gambits, Rheinmetall’s stock continues to languish. The Düsseldorf-based defence group closed at €1,165 on Wednesday, having lost more than 27% of its value since the start of the year. That puts the shares within 6% of their 52-week low, a stark contrast to the operational momentum the company is trying to project.

One of the clearest signs of that transformation is taking shape in Neuss. A former automotive supplier plant is being gutted and retooled to produce loitering munition — effectively kamikaze drones — from the third quarter of 2026. The factory will also manufacture launch containers for the systems. The move marks a definitive break with the group’s civilian past, and comes alongside a separate project to develop a new 155mm artillery charge that Rheinmetall says will extend the range of self-propelled howitzers by a third.

The other pillar of the turnaround was on display at the Eurosatory arms fair in Paris this week, where Rheinmetall and its Italian partner Leonardo unveiled a prototype for Italy’s next-generation battle tank. The New Main Battle Tank is a development demonstrator, built on a modified Leopard hull and fitted with a new turret that integrates technology from both parent companies. Key specifications include a 1,800 hp engine, improved mine protection and a remote-controlled 30mm cannon capable of engaging drones at extreme elevation. The joint venture, held equally by the two groups, is targeting an order worth more than €23bn to replace Italy’s entire armoured vehicle fleet. Rheinmetall sees additional export potential of up to €50bn over the next 15 years. No contract has been signed yet, and negotiations with the Italian defence ministry are ongoing.

Operationally, the company is firing on most cylinders. First?quarter revenue climbed 8% year on year to €1.9bn, while the order backlog hit an all?time high of €73bn. Management expects a marked acceleration in the current quarter. Yet the market remains deeply unconvinced. The stock touched a new low of around €1,100 in mid?May, and the relative strength index now stands at 41.5, suggesting only a mild stabilisation. The €1,165 close on Wednesday was below an intraday level of €1,170, underscoring the persistent selling pressure.

For now, both the tank joint venture and the drone conversion are strategic signals rather than immediate profit drivers. The Neuss plant will not begin production for another year, and the Italian armoured?vehicle programme will only contribute to earnings once a formal procurement contract is signed in Rome. The next milestone for investors comes on 6 August, when Rheinmetall publishes its second?quarter results and offers a fresh set of hard data on whether the group’s structural shift can finally convince the bears.