Rheinmetall’s Defence Makeover and Record Orders Collide With a Share Price Testing the 1,100 Euro Support

Rheinmetall completes shift to pure defence supplier with Power Systems sale, but stock drops 26% YTD. Key contracts and ILA Berlin may shift sentiment.

The Düsseldorf-based defence group has completed its transformation from a mixed industrial conglomerate into a focused pure-play military supplier, yet the stock continues to drift perilously close to its 52-week low. Shares ended Friday at €1,190.00, leaving the equity down roughly 26% since the start of the year and more than 40% below the September peak of €1,995.00. The gap between operational clarity and market sentiment has rarely been wider.

The final piece of the strategic puzzle fell into place with the sale of Power Systems to Aequita for around $406 million, removing the last civil automotive business from the portfolio. Some 6,250 employees transfer with the division, a move that management argues will allow Rheinmetall to be read as a pure defence stock rather than a conglomerate. In a market where investors increasingly seek targeted exposure to the defence theme, the divestiture is designed to command a premium valuation. So far, that logic has failed to register.

Meanwhile, concrete orders underline the group’s relevance. This week alone, Rheinmetall secured a historically significant contract from Romania covering Lynx infantry fighting vehicles, air defence systems and naval vessels — a demonstration of its “one-stop-shop” capability for European NATO partners. On the domestic front, the Bundeswehr has signalled requirements for 35 additional Schakal wheeled armoured vehicles, with a potential volume of around €650 million, and 23 Büffel recovery vehicles worth about €360 million. The order pipeline is also supported by plans to expand the Kassel site to 3,000 employees by 2029, a clear bet on sustained high demand.

The technical picture, however, tells a different story. The stock now trades well below its 200-day moving average of €1,620.26, a classic signal of persistent selling pressure. The relative strength index (RSI) sits at 39.6, pointing to an oversold condition but not yet to a decisive reversal. With the 52-week low of €1,099.80 just 8% below current levels, the support zone around €1,100 is the only line of defence before a deeper sell-off becomes likely.

In the week ahead, the narrative could shift on the back of the International Aerospace Exhibition (ILA) in Berlin, which starts on Wednesday. Rheinmetall is expected to showcase its partnership with Boeing on the MQ-28 Ghost Bat unmanned combat aircraft alongside next-generation loitering munition systems. The presentations aim to convince investors that the business model has moved beyond conventional tank-building into networked warfare, autonomous systems and space-based reconnaissance. A CEO conference in Paris provides an additional near-term catalyst.

The core tension remains. The company is executing exactly the kind of strategic consolidation the market has long demanded — shedding legacy businesses, locking in big-ticket contracts and positioning itself as a pure defence exposure. Yet the stock continues to price in either a cooling of the defence cycle or a correction of earlier valuation excesses. Whether the ILA platform can reset that perception will determine if the equity can hold the €1,100 floor or fall through to test fresh lows.