Rheinmetall's €73 Billion Backlog Fails to Lift a Slumping Stock as the Civilian Exit Nears Completion

Rheinmetall sells last automotive unit for €350M, boasts €73B order backlog, yet shares drop 25% in 2026. Upcoming ILA Berlin and ECB decision test market sentiment.

The strategic narrative could hardly be cleaner: Rheinmetall has jettisoned its last automotive business and boasts a record order book worth €73 billion. Yet the market remains distinctly unimpressed, leaving the defence pure-play to grapple with a share price that has shed more than a quarter of its value this year.

The disposal of the Power Systems division to Munich-based industrial group AEQUITA for a preliminary €350 million marks the final step in Chief Executive Armin Papperger’s long-running transformation. The transaction, expected to close in the fourth quarter of 2026, offloads a business that generated annual sales of roughly €2 billion and employed around 6,250 people worldwide. After the sale, Rheinmetall’s workforce contracts to about 34,000, almost all of them in the defence core. “This is a significant milestone,” Papperger said of the exit, which had been carried as a discontinued operation since late 2025.

On the operational side, the picture remains bright. The order backlog has climbed to an unprecedented €73 billion, giving the company multi-year production visibility that is rare in industrial sectors. In the first quarter of 2026, the air defence segment alone expanded by 43 per cent. Management is sticking to full-year guidance of €14 billion to €14.5 billion in revenue, with an operating margin of roughly 19 per cent.

The same confidence is absent from the trading floor. Rheinmetall shares closed at €1,190.00 on Friday, leaving them 25.69 per cent lower since the start of 2026 and 33.28 per cent down over twelve months. The stock now sits only 8.20 per cent above its 52-week trough, and the technical picture is strained: it trades 11.48 per cent below its 50-day moving average, while the relative strength index reads 39.6 — a level that suggests weakness without yet signalling an oversold extreme.

A twin set of events this week may offer a market test. From 10 to 14 June, Rheinmetall will exhibit at the ILA Berlin air show, where it plans to showcase the MQ-28 “Ghost Bat” unmanned combat aircraft alongside new satellite technologies as it pushes deeper into digitised warfare. For the management team, the fair provides a platform to demonstrate the breadth of a reconfigured group that positions itself as a full-spectrum supplier to NATO and allied nations.

The second variable lands mid-week with the European Central Bank’s interest-rate decision. A more accommodative policy path would tend to support industrial stocks, while a hawkish tone could complicate any bottoming process for Rheinmetall’s shares. Investors are also pricing in execution risk: the market wants to see whether the newly streamlined defence pure-play can convert its towering backlog into sustained earnings growth, rather than simply stacking up orders. The combination of a completed strategic overhaul and a record order book has yet to win over a sceptical market — the next chapters in Berlin and Frankfurt will show whether that story can change.