Rheinmetall’s €73 Billion Backlog and €3.4B Lynx Deal Can’t Arrest Slide to 52-Week Low

Despite a €3.4B Romanian contract, artillery expansion, and new naval business, Rheinmetall’s stock plunged 43% from peak as Q1 revenue missed forecasts and JPMorgan slashed its target.

The gap between operational momentum and investor sentiment has rarely been wider at Rheinmetall. The German defence giant is sitting on a record order book of €73 billion, including framework agreements, and has just secured one of Romania’s biggest military procurements — yet its shares have plunged to a one-year low. At €1,119.80 on Wednesday, the stock stood nearly 43% below its September 2025 peak of €1,995, before a marginal recovery to €1,140.60 the following day.

Romania’s selection of the Lynx KF41 infantry fighting vehicle in late April puts a €3.4-billion contract on the table for 232 units. Rheinmetall used the BSDA defence fair in Bucharest to pitch local production and technology-transfer plans, aiming to lock down the deal. At the same time, the company is aggressively scaling its artillery shell capacity: 155-mm ammunition output is slated to hit 1.1 million rounds by 2027 and 1.5 million by the end of the decade, while 120-mm tank munitions production is targeted at 240,000 rounds annually from 2027.

Beyond traditional armour, Rheinmetall is moving into urban air defence. Together with Deutsche Telekom, it is developing a drone shield for cities and critical infrastructure. T-Systems supplies the detection technology; Rheinmetall brings the laser systems, sensors and physical interceptors. The partnership, announced ahead of the AFCEA security fair in Bonn, also involves the Helmut-Schmidt University to tackle the particular challenge of mobile-network-controlled drones, which now represent a growing share of the threat. Separately, the acquisition of Lürssen’s marine division gave the new naval segment an immediate order backlog of €5.5 billion.

The numbers themselves tell a mixed story. First-quarter revenue rose 8% to €1.94 billion and operating profit jumped 17%, but the top line fell short of analysts’ high expectations and free cash flow turned negative. The annual shareholders’ meeting approved a dividend of €11.50 per share for 2025, a 42% increase from the prior year, yet the payout did little to steady the stock.

JPMorgan responded to the Q1 shortfall with a sharp course correction, slashing its price target from €2,130 to €1,500 and downgrading the shares from “Overweight” to “Neutral.” The bank noted that Rheinmetall had missed market forecasts in four of the past six months, making downward revisions more likely than upgrades. Other houses were less bearish: Warburg Research raised its recommendation to “Buy” with a €1,550 target, mwb research also upgraded to “Buy” at €1,450, and Barclays kept an “Overweight” rating with a €2,125 price objective.

Technically, the sell-off has been amplified by auto-pilot triggers. The stock went ex-dividend on May 13, and the breach of key support levels unleashed waves of automated selling, with panic trades accelerating the decline after the quarterly release. The relative strength index now sits at 91, flashing extreme oversold territory — a condition that can sometimes signal a floor, but has yet to draw a sustained bid.

Management continues to guide for organic revenue growth of up to 31% this year, translating to sales between €14 billion and €14.5 billion. That outlook, underpinned by the largest order book in the company’s history, leaves the market in a waiting game: investors want to see faster conversion of that backlog into cash and revenue, and only the next few quarters will reveal whether the current price reflects a buying opportunity or a structural repricing.