Rheinmetall’s €5bn Weekly Haul Does Little to Halt a 13% Year-to-Date Slide

Rheinmetall secures over €5bn in new contracts, including a €3.4bn Romanian deal, but shares languish. Q1 results on May 7 will test margin guidance and market pessimism.

The dissonance between Rheinmetall’s bulging order book and its languishing share price has rarely been more pronounced. The defence contractor has racked up more than €5bn in contract wins in the past week alone, yet the stock ended April at a 12-month low of €1,330.20 — roughly 13% below where it started 2025. All eyes now turn to Tuesday’s first-quarter results for clues on whether the market’s pessimism is overdone.

Romanian windfall and Bundeswehr backlog

The biggest single catalyst came out of Bucharest. Romania’s defence ministry selected Rheinmetall’s Lynx KF41 infantry fighting vehicle to replace ageing Soviet-era hardware, in a deal worth around €3.4bn. The order covers 232 vehicles financed through EU-SAFE funds — valued at approximately €2.6bn — with a further 66 units to follow under follow-on contracts worth an additional €739m. The contract will be executed by Rheinmetall Automecanica SRL, the group’s Romanian subsidiary. One hurdle remains: the Romanian parliament must approve the deal by the end of May before formal contract award.

A second Romanian contract adds nearly €1bn for the construction of two light corvettes and two diver support vessels. The Mangalia shipyard is set for a strategic overhaul, with Rheinmetall taking a majority stake in the joint venture.

Closer to home, on 27 April Rheinmetall announced a €1.04bn gross call-off from an existing Bundeswehr framework agreement. The funds will equip around 8,600 soldiers with 237 platoon systems under the “Infanterist der Zukunft” programme, alongside upgrades to existing gear.

Margins under the microscope

The market’s muted reaction to this torrent of orders underscores the scepticism that has built up over recent months. While the group’s order backlog is expected to swell to roughly €135bn by year-end, last year’s full-year results missed expectations on free cash flow and revenues came in below analyst estimates of around €15bn. The message is clear: a fat order book does not automatically translate into near-term earnings acceleration.

When Rheinmetall reports first-quarter numbers on 7 May, investors will be laser-focused on margins. Management has guided for revenue growth of 40% to 45% this year, targeting sales of €14.0bn to €14.5bn, with an operating margin of around 19%. The quarterly report will be the first under a revamped corporate structure — new segments including Air Defence and Naval Systems were introduced in January — offering deeper visibility into divisional profitability.

Dividend hike and the Arminius elephant

Five days after the Q1 release, on 12 May, the group holds its virtual annual general meeting. The board has proposed a dividend of €11.50 per share, up sharply from €8.10 a year earlier.

Looming in the background is the Arminius programme — a planned Bundeswehr framework contract for more than 3,000 GTK Boxer armoured vehicles. CEO Armin Papperger has estimated the total value at up to €40bn, with Rheinmetall’s share through the ARTEC joint venture coming in at roughly €22bn. Final signing is expected between early and mid-2026.

Analyst consensus remains bullish

Technically, the stock is under pressure. Rheinmetall currently trades below both its 50-day and 200-day moving averages, a classic signal of medium-term selling momentum. Yet the fundamental view is far more optimistic. A consensus of 21 analysts leans heavily towards buy recommendations, with not a single sell rating in sight. The average price target stands at €2,051 — implying roughly 54% upside from current levels.

The coming days will test whether that conviction is warranted. If Rheinmetall delivers stable margins and a credible cash flow trajectory on Tuesday, the selling pressure could ease. Should the numbers disappoint, the stock may revisit its recent lows. For now, the gap between operational reality and market perception remains wide — and only hard numbers can close it.