Rheinmetall’s CEO Loaded Up on Shares the Day a Major Naval Contract Was Killed

CEO Armin Papperger spent €3M on Rheinmetall shares the day Germany canceled F126 frigates, costing €300M in revenue. Stock down 39% YTD despite €73B order book.

On the very day Germany’s defence ministry cancelled the fifth and sixth F126 frigates, Rheinmetall’s chief executive bought into his own company for the first time in months. Armin Papperger spent roughly €3.04 million on shares at prices between €950.30 and €955.00 on 25 June 2026, while supervisory board member Andreas Georgi added another €47,665 at €953.30. The timing puts the insider purchases in direct contrast to a move that will cost the group up to €300 million in projected 2026 revenue – the Fregattenprogramm cancellation that defence minister Pistorius announced the same day.

The stock has since edged higher to around €982.90, clawing back about 2.6 percent on the Friday after the purchases, but remains deep in the red for 2026. With a year-to-date loss of roughly 39 percent and a 52-week low of €902.50 just 8.9 percent below current levels, the shares are trading as if little of the company’s operational momentum matters. That gap between performance and perception is at the heart of the debate over Rheinmetall’s direction.

Analysts have been scrambling to recalibrate their models. Bank of America’s Benjamin Heelan slashed his price target from €1,770 to €1,300 on 17 July, maintaining a “Buy” rating but warning that the structural shift in warfare towards drones and precision munitions will cap long-term expectations for traditional guns and ammunition through 2030. The cut was the second high-profile revision in days: Berenberg’s George McWhirter had already lowered his target from €1,750 to €1,600 on 8 July, also keeping a “Buy” call, after the F126 cancellation.

Operationally, however, the group continues to pile up orders that would be the envy of most industrial companies. Its first-quarter order book stood at €73 billion, and the second-quarter order intake is now expected to reach a low-double-digit billion euro figure – down from the earlier estimate of roughly €20 billion solely because of the frigate loss. Revenue guidance for the full year still calls for growth of over 60 percent.

Recent weeks have brought a flurry of contract wins. On 13 July, Rheinmetall and Raytheon together clinched a 15-year British defence ministry deal to digitise battlefield training, with Rheinmetall’s share worth nearly €1 billion. Two days earlier, a joint contract with MBDA Deutschland for a high-energy laser weapon system for the German navy, valued in the mid-triple-digit million euro range, was signed; operational capability is targeted by 2029. A memorandum of understanding with Lockheed Martin to build ATACMS rockets in Europe – the first production line outside the US, to be sited at Unterlüß – was inked on 7 July. Additional orders include thousands of 155mm artillery shells for Ukraine, a Kuwaiti navy contract for soft-kill systems, and first deliveries from the expanded Unterlüß plant to meet rising NATO demand, announced on 15 July.

Beyond conventional munitions, Rheinmetall is pushing into space. A memorandum of understanding with Space Norway, signed in mid-July, aims to integrate C-band SAR satellite capability for maritime surveillance in the Arctic and North Atlantic, linking to the bilateral Hansa agreement between Germany and Norway. The group already supplies X-band SAR data through its SPOCK-1 programme.

But the expansion comes with growing pains. Free cash flow turned negative in the first quarter, a sign that rapid growth consumes capital before it turns into cash. A capital increase completed on 15 July raised the total voting rights to 46,789,567, slightly diluting earnings per share. And the stock’s RSI of 34.7 suggests it is oversold, yet the market remains fixated on the headwinds: the F126 writedown, the cash drain, and the long-term shift in military technology that analysts like Heelan are highlighting.

On the ground in Berlin, the conversion of a former auto-parts plant in Wedding into a munitions-components factory – employing around 350 workers, with no explosives handled on site – has drawn protests from the “Berliner Bündnis gegen Waffenproduktion”. The company plans to more than double its workforce from 40,000 to 70,000, reflecting the German government’s ambition to spend more than €150 billion annually on external security from 2029.

Export approvals for German arms hit a record €13.87 billion in the first half of 2026, more than the full-year total of €12 billion in 2025, with €9.6 billion of that for weapons of war. Ukraine remained the single largest recipient at €2.5 billion, while 84 percent of licences went to EU, NATO or equivalent states.

For all the operational noise, the market’s focus now shifts to 6 August, when Rheinmetall releases its second-quarter and first-half results. The numbers will show whether the record order book, the new factories, and the space pivot are enough to convince investors that the stock’s 40 percent slide has overshot reality – or whether the concerns about cash, cannibalisation and the end of the artillery super-cycle are only just beginning to be priced in.