Rheinmetall’s €73bn Backlog Fails to Shield Shares From 10% Rout as Cruise Missile Plans Take Shape

Rheinmetall stock plunges 10% to 52-week low after Q1 revenue of €1.9bn misses €2.3bn forecast, despite record €73bn order backlog and full-year targets reaffirmed.

The disconnect between Rheinmetall’s strategic ambitions and its stock market performance has rarely been starker. While the defence group pushes into cruise missile production and expands its naval footprint, investors delivered a brutal verdict on Friday, sending shares to a fresh 52-week low after a first-quarter revenue miss.

The Düsseldorf-based company booked sales of around €1.9bn in the opening three months of 2026, falling well short of the €2.3bn analysts had pencilled in. Although both revenue and operating profit rose year-on-year, and the margin landed exactly where experts had forecast, the absolute top-line disappointment proved toxic. The stock crashed more than 10% on the day, closing at €1,207.20 — a level that marks both a new year-to-date low and a 52-week trough. Since January, the shares have shed roughly a quarter of their value.

The sell-off came despite a record order backlog that swelled to €73bn, fuelled in part by the newly integrated Naval Systems division. Rheinmetall recently acquired several shipyards in northern Germany and is now building frigates, with the marine business contributing €5.5bn in fresh orders alone. CEO Armin Papperger confirmed the group’s full-year targets and signalled a sharp acceleration in the second quarter, forecasting new orders of more than €20bn, predominantly for main battle tank programmes and frigate ammunition.

Yet the market’s focus remained fixed on the near-term disappointment. Analysts noted that project delays and capacity constraints are tempering the pace of growth, even as the strategic outlook remains compelling. The average price target among 66 analysts covering the stock stands at roughly €2,117, implying massive upside from current depressed levels.

Papperger is pushing ahead with portfolio expansion regardless of the share price turbulence. Rheinmetall plans to start producing cruise missiles later this year at its site in Unterlüß, Lower Saxony, through a joint venture with Dutch firm Destinus. The Ruta Block 2 system, equipped with AI-guided navigation to penetrate enemy air defences, can strike targets up to 700 kilometres away. The move comes as US President Donald Trump’s administration is expected to shelve planned Tomahawk deployments in Germany, creating a gap in European long-range strike capabilities that Rheinmetall aims to fill. Demand is also rising in the Middle East, where the company intends to double its air defence systems by the end of 2027 amid the Iran conflict, though tight production capacity is currently constraining the pace.

All eyes now turn to Tuesday, 12 May, when Rheinmetall holds its virtual annual general meeting. The board is proposing a dividend of €11.50 per share, up sharply from €8.10 last year. If shareholders approve the payout, the cash will be distributed on 15 May, with the ex-dividend date falling the day after the AGM. Papperger will face investors who need convincing that the promised wave of mega-orders will materialise in the second half of the year, and that the strategic bets on naval shipbuilding and cruise missiles will translate into tangible earnings growth rather than just headline-grabbing announcements.