Rheinmetall’s Dividend Hike and Record Orders Fail to Lift a Stock Stuck at 52-Week Lows

Rheinmetall's shares hit near 52-week low amid valuation fears and shifting defense budgets, even as dividend rises to €11.50 and order backlog tops €63.8 billion.

The disconnect between Rheinmetall’s booming operational performance and its tumbling share price has rarely been starker. While the defence contractor prepares to hand shareholders a sharply increased dividend of €11.50 per share — up from €8.10 last year — the stock closed at €1,357.80, hovering near a 52-week low of €1,337.60 hit on 29 April. That marks a drop of roughly 32% from the September peak of €1,995 and a decline of more than 15% since the start of the year.

The market’s skittishness stems partly from valuation concerns. With the stock’s growth narrative already heavily priced in, even minor headwinds are triggering outsized reactions. One such catalyst came from mwb research, which downgraded its stance after Lockheed Martin’s weak quarterly results. The analyst’s core thesis: Western defence budgets are shifting towards cruise missiles, air defence and autonomous systems, away from traditional land systems — Rheinmetall’s bread and butter. The Weapons & Ammunition segment, which the company targets to grow to between €14 billion and €16 billion by 2030, relies heavily on 155mm artillery. mwb warned that industry-wide capacity expansion could eventually squeeze margins, leaving little room for disappointment at current valuations.

The analyst community is deeply split. Goldman Sachs maintains a buy rating with a €2,300 price target, while UBS is even more bullish at €2,500. Warburg Research takes a more cautious stance with a “hold” and a €1,740 target, and mwb research has cut its price objective to €1,450 while keeping a “hold” rating. The average analyst target sits at roughly €2,144, implying significant upside from current levels — if the company can deliver on its promises.

And those promises are substantial. Management expects group revenue to reach between €14.0 billion and €14.5 billion in 2026, representing growth of 40% to 45%. The operating margin is forecast to climb to around 19%. Crucially, 91% of that targeted revenue is already backed by existing orders. The order backlog stood at €63.8 billion at the end of 2025 and is projected to swell to more than €135 billion by the end of next year.

Beyond the numbers, the company is pushing ahead with strategic initiatives. In Hamburg, serial production of the Kraken K3 Scout unmanned surface vessel has begun at the Blohm+Voss facility. The joint venture Rheinmetall Kraken GmbH is initially targeting around 200 units per year, with capacity scalable to 1,000 depending on demand. The vessels, capable of speeds up to 55 knots, are designed for both military and civilian applications.

In April, Rheinmetall also announced plans for a new joint venture with Destinus. The proposed Rheinmetall Destinus Strike Systems will focus on missile production, with Rheinmetall holding a likely 51% stake. The venture is expected to be established in the second half of 2026, subject to regulatory approvals.

Two key dates loom on the calendar. On 7 May, the company will release its first-quarter results, with order intake and margin trends under close scrutiny. Five days later, on 12 May, the virtual annual general meeting will see shareholders vote on the proposed €11.50 dividend. The Q1 numbers will be the first real test of whether the underlying strength of the business can finally pull the stock out of its rut.

From a technical perspective, the next support level sits at around €1,267. A daily close above the €1,380 to €1,410 zone could brighten the near-term picture and open the door for a recovery towards €1,464. For now, however, the selling pressure remains persistent, with negative money flow suggesting that the bears are still in control.