Rheinmetall's Deal Blitz Masks a Stock Under Siege

Rheinmetall secures major contracts including €1B British training deal and artillery deliveries, but stock plunges 37% YTD due to potential F126 frigate cancellation worth up to €300M.

A torrent of contract wins has swept through Rheinmetall this month, from a €1 billion slice of a British army digital-training consortium to a space-based maritime surveillance pact and the first artillery shell deliveries from a new German plant. Yet the Düsseldorf-based defence group’s shares remain deep in the red, weighed down by a looming frigate cancellation and persistent investor caution.

The stock closed Friday at €978.00, up 1.85% on the day, but that bounce does little to repair a devastating 37.03% year-to-date loss. The 52-week high of €1,995.00, set last September, now looks remote — the shares are more than 51% off that mark. With the Relative Strength Index hovering at 37.5, the technical picture suggests an oversold condition, yet buying interest has been tepid.

A June of Heavy Metal and New Horizons

On 14 July, Rheinmetall confirmed it had started delivering 155mm RH1412 artillery rounds from its new Unterlüß facility to Ukraine. The initial consignment runs to a low five-digit number of shells, with more than half already shipped and the remainder expected to leave the factory before year-end. The plant is central to the company’s ambition to lift annual artillery-shell capacity to around 1.5 million units by 2030, reducing reliance on foreign suppliers.

The same day, the group completed its first training of British army personnel on autonomous HX logistics convoys, ahead of a major international exercise. It also took over full responsibility for the “InterRoC VII” research project — a cross-manufacturer effort to automate military logistics convoys — on behalf of the German procurement office.

Two days later, on 16 July, Rheinmetall announced a far bigger prize: its role in the “Omnia-Training” consortium, led by Raytheon UK, which has won a 15-year programme to digitise British army combat training. Rheinmetall’s share is roughly €1 billion. The deal follows a memorandum of understanding signed a day earlier with Norway’s Space Norway to pool radar satellite data — X-band from Rheinmetall’s joint venture Rheinmetall ICEYE Space Solutions and C-band from the Norwegian side — for maritime surveillance in the Arctic and North Atlantic.

Even the Middle East is contributing: on 10 July, the Kuwaiti navy placed a large order for MASS decoy launchers, used for ship self-defence. Media reports also indicate that from 2026, Unterlüß will host joint production of the ATACMS missile system with Lockheed Martin for the European market.

The F126 Shadow

For all the deal flow, one unresolved risk continues to hang over the stock. In an ad-hoc announcement on 2 July, Rheinmetall disclosed that the German government is reviewing the cancellation of frigates 5 and 6 under the F126 programme. If no compensatory measures emerge, the company faces a revenue hit of up to €300 million in 2026. That potential hole is likely to dominate investor attention when Rheinmetall publishes its second-quarter results on 6 August.

Analysts Hold Fire

Despite the share price slump, sell-side sentiment remains largely constructive. Jefferies reaffirmed its “Buy” rating and €1,300 price target on 10 July, while UBS also kept a “Buy” with an even more ambitious €1,600 target on 7 July. Both targets imply substantial upside from current levels, but the market has so far shrugged off the optimism. The disconnect between a bulging order book and a beleaguered stock chart has seldom been wider. The Q2 report on 6 August will be the next test of whether the momentum on the ground can finally translate into a sustainable recovery in the share price.