Rheinmetall’s €70bn Order Backlog Offers Little Cover as a NATO Reorientation and the F126 Cancellation Send the Stock Lower

Rheinmetall shares tumble nearly 50% in a year as F126 frigate cancellation and NATO procurement shift overshadow new deals in drones, naval decoys, and laser weapons.

Rheinmetall kicked off July with a flurry of announcements that would ordinarily be cause for celebration. A new joint venture in Croatia to manufacture unmanned ground vehicles, a contract to equip Kuwaiti warships with decoy systems, a multi-hundred-million-euro laser weapon programme for the German navy, and a memorandum of understanding with Lockheed Martin to produce ATACMS missiles in Europe. Yet the company’s shares closed on Friday at €993.00 — a mere 10% above their 52-week low, and nearly half the peak reached last September. The disconnect between operational momentum and market sentiment could hardly be starker.

The stock lost 9.48% over the past seven trading days and 16.96% over the month. Since the start of 2025, Rheinmetall has shed 38% of its value, and on a twelve-month basis the decline stands at 46.25%. The driving forces are twofold. First, the cancellation of a major portion of the F126 frigate programme by the German government — a blow that wipes out a planned order volume of roughly €20 billion for the overall project and, according to reports, cuts up to €300 million from Rheinmetall’s own expected revenue this year. Second, a broader shift in NATO procurement priorities away from traditional land systems and toward drones, specialised air defence, and naval capabilities — a pivot that was explicitly confirmed at the NATO summit in Ankara and that hits Rheinmetall’s core business directly.

The F126 setback is particularly painful because it had been a cornerstone of the group’s naval ambitions. Rheinmetall immediately halted its maritime expansion plans, scrapping around 1,000 planned jobs. Analysts at MWB Research responded by downgrading the stock to “hold” and slashing their price target from €1,400 to €1,150 — still above the current level, but a clear acknowledgment that near-term momentum has evaporated. The pure revenue impact for this year may be manageable against an expected total turnover of roughly €14.2 billion, but the market is looking beyond the immediate numbers. Goldman Sachs has raised a more fundamental question: can Rheinmetall efficiently execute on its massive order backlog, which now stands at over €70 billion? That concern, rather than the F126 cancellation alone, appears to be the deeper source of investor scepticism.

Against this headwind, the company is racing to diversify. The new joint venture Rheinmetall Unmanned Vehicles d.o.o., established on 8 July with Croatian specialist DOK-ING, aims to turn Croatia into a European hub for autonomous ground platforms used in combat support, engineering, and mine clearance. DOK-ING brings more than 30 years of experience; Rheinmetall brings global manufacturing scale. Research and development will remain in Croatia. Just two days later, Kuwait placed its first order for the MASS naval decoy system, to be fitted on eight vessels, with a contract value in the mid-double-digit million euro range.

The laser weapon programme, co-developed with MBDA and formally contracted by the German military on 9 July, is the most eye-catching of the new projects. The system underwent a year-long trial aboard the frigate Sachsen, during which it fired more than 1,000 shots. It is designed to neutralise drones, fast attack craft, and potentially even supersonic missiles, with operational readiness targeted for 2029. The contract is valued in the mid-triple-digit million euro range. Rheinmetall is also exploring the conversion of former automotive plants — including sites that Mercedes-Benz and Volkswagen are reportedly considering for defence work — to expand production capacity and tackle its bulging order book.

The chart paints a grim technical picture. At €993, the stock is 50.23% below its 52-week high of €1,995.00 touched in September 2025, and only about 10% above the year’s low of €902.50 set on 25 June 2026. The 50-day moving average stands at €1,168.88, the 100-day at €1,352.71, and the 200-day at €1,518.21 — all far above the current price, underscoring the persistent downward pressure. The relative strength index of 37.2 is not yet in oversold territory, but the annualised volatility of 68.77% reflects the jitters gripping the sector. Should selling continue, chartists are eyeing support levels at €880 and then €830.

With a market capitalisation of €49.52 billion, Rheinmetall remains the heavyweight of the German defence industry. But the coming week will test whether management can offer credible compensation for the F126 loss, whether further details from the NATO summit reinforce the reorientation, and whether initiatives such as the cooperation with ARX Robotics on unmanned land systems in Ulm can begin to shift the narrative. For now, the market is voting with its feet — and the order book, however impressive, has yet to change its mind.