Rheinmetall’s €40bn Arminius Prize Hangs in the Balance as Shares Languish Near Yearly Lows

Rheinmetall's share price lags its record orders amid margin scrutiny, dividend hike, and pending €40bn Arminius deal. Key events this week may break the stalemate.

The disconnect between Rheinmetall’s bulging order book and its flagging share price has rarely been starker. The Düsseldorf-based defence group has been racking up contracts at a blistering pace, yet its stock continues to drift close to its lowest point of the year, down roughly 15% since January. With a clutch of critical events converging in the coming days, the market may finally be forced to reconcile the two.

A Week of Reckoning

The first major test arrives on 7 May, when Rheinmetall publishes its first-quarter results for 2026. Investors will be laser-focused on operating margins, the key metric that has kept the bears circling. The company is trading on a price-to-earnings multiple of nearly 35 — a lofty valuation that leaves little room for error. Any disappointment on profitability could trigger a sharp sell-off, with chartists eyeing support around the €1,300 mark.

Five days later, on 12 May, shareholders gather for the annual general meeting. On the agenda is a proposed dividend of €11.50 per share, a hefty increase from last year’s €8.10 payout. If approved, the cash will land in accounts on 15 May. The dividend hike is a clear signal of management’s confidence, but it does little to address the market’s deeper concerns about cash flow and capital intensity.

The Arminius Elephant in the Room

The single biggest catalyst for the stock remains the Bundeswehr’s “Arminius” programme — a plan to acquire up to 3,000 Boxer armoured vehicles. Analysts estimate the total contract value at up to €40bn, with Rheinmetall’s share likely around €22bn. The deal has been telegraphed for months, but the final signature from the defence ministry has yet to materialise. Until it does, the market is pricing in execution risk.

Alongside this mega-deal, Rheinmetall is also pursuing a Romanian programme worth nearly €1bn, which requires parliamentary approval by the end of May. The company’s naval ambitions are growing too: in late April, it christened a new corvette for the German Navy in Hamburg, and a separate Romanian contract for Lynx infantry fighting vehicles, air defence systems and patrol ships is valued at around €3.4bn.

The Cash Flow Conundrum

Despite the torrent of orders, the stock has shed roughly a third of its value from its all-time high. One persistent headache is the company’s voracious appetite for capital. Rheinmetall has been stockpiling critical components worth €8bn to ramp up production capacity, a strategy that ties up enormous amounts of cash and weighs on free cash flow. Analysts expect earnings per share of around €39 this year — more than double last year’s figure — but that forecast hinges on margins holding up as output scales.

The technical picture offers little comfort. The share price is hovering around €1,355, well below its 200-day moving average. A sustained recovery would require a decisive break above the 20-day moving average, a threshold that has so far proved elusive.

What Comes Next

The next few days will determine whether Rheinmetall can finally close the gap between its operational momentum and its market valuation. A strong Q1 margin performance, followed swiftly by the Arminius contract signing, would give the bulls the ammunition they need to stage a turnaround. A weak margin print, by contrast, could send the stock sliding towards the €1,300 support level — and leave investors wondering when the good news will ever be enough.