Rheinmetall’s €40bn Bundeswehr Mega-Deal and Romanian Ambitions Fail to Halt a 22% Rout

Rheinmetall's shares plunge 22% to a yearly low, even as historic €40B German and Romanian defence contracts signal strong operational momentum.

The Düsseldorf-based defence contractor is living a contradiction: its order book is swelling with historic contracts, yet its share price is plumbing depths not seen in a year. Rheinmetall’s stock hit a fresh 12-month low of around €1,330 in late April, and by the close on 1 May it was trading at €1,341.20 — a drop of more than 22% since the end of February. The disconnect between operational momentum and market sentiment has become the defining puzzle for investors.

Two Blockbuster Programmes on the Horizon

The most transformative deal in the pipeline is the Bundeswehr’s “Arminius” programme, the largest wheeled armoured vehicle purchase in German military history. The framework agreement is set to cover more than 3,000 additional GTK Boxer vehicles, with CEO Armin Papperger estimating the total value at up to €40bn. Rheinmetall’s share of that windfall is expected to be around €22bn, channelled through the ARTEC joint venture in which it holds a majority stake. The initial firm order is pencilled in for roughly 1,800 vehicles, with the flexible framework sparing the need for protracted individual negotiations on different model variants. A final contract signature is expected between early and mid-2026 — a potential catalyst that could arrive within weeks.

Across the Carpathians, Romania is preparing to modernise its armed forces with two substantial Rheinmetall contracts. The first, worth approximately €3.4bn, covers the procurement of Lynx KF41 infantry fighting vehicles to replace ageing Soviet-era MLI-84 models. Funding is being channelled through the EU’s SAFE programme, and the Romanian defence ministry submitted the project list to parliament for approval on 29 April. The package also includes helicopters, wheeled armoured vehicles, air defence systems and ships, positioning Romania as the second-largest beneficiary of the SAFE initiative. Local industry participation is expected to be a key feature of the Lynx project.

The second Romanian deal could see Rheinmetall take the lead on a naval programme valued at over €920m for four vessels — two multi-purpose patrol boats in corvette configuration and two diver support ships. The corvettes will be based on designs from the NVL Group, whose military division Rheinmetall acquired in March 2026 and integrated as its “Naval Systems” unit. The Romanian order would serve as an early test case for this newly formed segment.

Q1 Results and Dividend Vote Loom

Two key dates are circled on the calendar. On 7 May, Rheinmetall will release its first-quarter 2026 results, with analysts closely watching operating margins and the order backlog. For the full year, the consensus earnings-per-share estimate stands at €39.61 — a roughly 166% jump from the prior year. Five days later, on 12 May, the company holds its virtual annual general meeting, where shareholders will vote on a proposed dividend of €11.50 per share, up sharply from €8.10 last year.

Management’s medium-term targets underscore the operational momentum. For the current financial year 2026, the board expects revenue to surge by around 40% to as much as €14.5bn, compared with just under €10bn last year.

Expanding into Autonomous Systems

Beyond its core armoured vehicle business, Rheinmetall is also pushing into unmanned systems. The company is acquiring a 51% stake in Croatian specialist DOK-ING, with the founder retaining the remaining 49%. The purchase price has not been disclosed, and the transaction still requires regulatory clearance. DOK-ING has delivered around 500 platforms to date, many of which are being used for mine clearance in Ukraine.

The unusually high visibility of Rheinmetall’s future revenues provides a solid fundamental backdrop. Yet the share price has stubbornly refused to reflect that reality. Market watchers point to technical factors overriding the positive news flow. A concrete trigger for a re-rating may already be in the diary: if the Arminius contract is finalised in the coming weeks, it could deliver the long-awaited impulse that the order book — and the stock — has been waiting for.