Rheinmetall’s Containerised Drone Swarm Steals the Show as Share Price Stays Grounded

Despite unveiling drone swarms, cruise missile JV, and new battle tank at Eurosatory, Rheinmetall shares remain 40% below peak, with Berenberg seeing a buying opportunity.

Rheinmetall may have captured the imagination of defence insiders at the Eurosatory exhibition in Paris, but the stock market has yet to share the enthusiasm. The Düsseldorf-based arms maker’s most eye-catching exhibit — a container-based launcher that fires swarms of up to 18 loitering munition drones — stood in stark contrast to a share price that remains nearly 40% below its 52-week peak.

The containerised multi-launcher, housed in a standard 20-foot sea container, uses rocket boosters to deploy Rheinmetall's FV-014 drones over distances of up to 100 kilometres, with a flight endurance of 70 minutes. The system’s open architecture allows for rapid integration of other munition types, and the company sees applications ranging from air defence and border protection to the defence of commercial vessels.

Alongside the drone showcase, Rheinmetall announced two significant collaborative moves. It signed a letter of intent with Dutch firm Destinus on 18 June to form a joint venture, Rheinmetall Destinus Strike Systems, aimed at qualifying the Ruta Block 3 cruise missile — with a 2,000-kilometre range — by the end of 2028. On the same day, it inked a memorandum of understanding with US-based Vantor to establish another joint venture in Germany, bringing Vantor’s Tensorglobe reconnaissance platform into Rheinmetall’s command-and-control systems. The goal is to forge a sovereign European intelligence, surveillance and reconnaissance capability.

The exhibition also saw the unveiling of the New Main Battle Tank (NMBT) developed by the Leonardo Rheinmetall Military Vehicles joint venture. Designed to replace Italy’s Ariete, the NMBT combines modern firepower, digital networking and unmanned systems.

Yet for all this activity, Rheinmetall’s stock closed on Friday at €1,200.20, a modest 2.16% gain on the day but a cumulative 25% decline since the start of the year. That leaves the shares roughly 40% below the September 2025 high of €1,995. The 200-day moving average of around €1,585 represents a 24% premium to the current price, while the 52-week low of €1,099.80, touched on 13 May, remains less than 9% away. The relative strength index of 46.8 suggests no extreme oversold or overbought conditions, though annualised volatility of 41% signals persistent nervousness.

Analysts at Berenberg see the disconnect as an opportunity. George McWhirter reaffirmed a “Buy” rating and a €1,750 price target on 19 June, following his visit to Eurosatory. He noted higher attendance compared with two years ago and described the current valuations in European defence as attractive against a backdrop of strong earnings growth. Berenberg pointed to the NATO summit on 7-8 July and the confirmation of expected major orders as potential catalysts.

Rheinmetall’s order backlog stands at roughly €73 billion, providing what the company calls “exceptional planning certainty”. For 2026, management still targets revenue of between €14.0 billion and €14.5 billion and an operating margin of around 19%. The second-quarter earnings report is due on 6 August.

This week, the board is scheduled to attend the Mediobanca CEO Conference in Milan on 23 June and the Baader Bank Partner Summit in Unterschleißheim on 25 June. Meanwhile, the reality of rising defence demand was underscored by Germany’s participation in NATO exercise “Freedom Shield 2026” in Lithuania, where some 2,300 German soldiers joined about 2,900 troops and 800 vehicles. For Rheinmetall, such large-scale manoeuvres typically translate into follow-on contracts for spare parts and modernisation work. The gap between the company’s operational momentum and its share price, however, remains the most stubborn puzzle on the trading floor.