Rheinmetall's Grand ILA Vision Clashes With a Stock in Technical Distress

Despite a record €73B order book and ambitious air show display, Rheinmetall shares are down 40% from peak as Q1 revenue miss fuels execution concerns.

Rheinmetall will take centre stage at Berlin’s ILA air show next week with a sprawling 840-square-metre exhibit, showcasing everything from autonomous combat aircraft to space-based surveillance and F-35 production lines. It is the kind of high-profile narrative the defence contractor desperately wants to sell. The share price, however, is telling a far more sobering tale.

The stock closed at €1,190.00 on Friday, a level that leaves it 40.35% below its 52-week peak of €1,995.00 and a mere 8.20% above the year’s low of €1,099.80 touched on 13 May. Since the start of 2025, the equity has surrendered 25.69% of its value. The sell-off has picked up pace lately: losses stand at 7.87% over the past seven days and 17.02% over the past month. Technical readings underscore the shift — the relative strength index sits at 39.6, still above oversold territory, while the 30-day annualised volatility has surged to 51.81%.

The discord between the operational story and the market’s mood stems in large part from a first-quarter revenue miss that jolted investors. Revenue came in at €1.94 billion, up 8% year-on-year but well shy of consensus. Management attributed the shortfall to timing: expected truck handovers in Germany were pushed into the second quarter, and production at a Spanish munitions plant has only just resumed. The company insists its full-year guidance is intact — revenue of €14.0–14.5 billion, an operating margin of around 19%, and order coverage of roughly 97% of planned sales.

That confidence is underpinned by a record order book that has ballooned further. As of 31 March 2026, the backlog stood at €73 billion, up from €63.8 billion at the end of 2024 and €56 billion a year earlier. The figure equates to roughly five times the expected 2026 sales, a cushion that would make most industrial companies envious. Yet the market is now asking a harder question: how fast can that mountain of contracts be converted into cash flow and earnings?

Execution risk has become the dominant concern, and the ILA fair — running from 10 to 14 June — offers a platform to address it. Rheinmetall will display the Boeing MQ-28 Ghost Bat, a collaborative combat aircraft, alongside its own FV-014 loitering munition system that blends reconnaissance with precision strike. The space dimension is equally prominent: the joint venture Rheinmetall ICEYE Space Solutions recently secured a billion-euro Bundeswehr contract for satellite-based reconnaissance via SAR technology, while the F-35 assembly plant in Weeze was built in under 18 months and is now one of Europe’s most advanced military aircraft facilities.

These moves reinforce the group’s transformation from a land-focused defence supplier into a broad-spectrum player covering air, space, maritime and digital domains. But the market’s patience has limits. The 200-day moving average of €1,620.26 sits 26.56% above the current price; the 50-day average of €1,344.32 is still 11.48% higher. Both indicate that near-term momentum remains firmly negative.

Geopolitical cross-currents add another layer of uncertainty. Progress in Ukraine peace talks — US President Donald Trump and President Volodymyr Zelenskyy have both said they are “significantly closer” to a deal — tends to weigh on defence stocks that have priced in years of elevated spending. Europe’s military outlays reached a record €864 billion in 2025, a 14% increase, and Germany plans to spend over €108 billion on defence next year while targeting a NATO commitment of 3.5% of GDP. These structural tailwinds are not in doubt, but the market is increasingly discounting them with a shorter horizon.

Meanwhile, the broader macro calendar could influence sentiment further. On 8 June, Germany’s statistics office releases data on manufacturing orders and industrial output for April, followed by foreign trade figures and the production index a day later. The OECD publishes its economic outlook on 9 June. All are relevant to a defence group that, while heavily exposed to government contracts, still depends on supply chains, energy prices and export sentiment that ripples through the entire industrial base.

The next hard corporate milestone is the second-quarter report due on 6 August. Until then, the share price will be shaped by chart levels, geopolitical headlines and the macro data stream. ILA Berlin gives Rheinmetall a stage to sharpen its narrative, but after a 25% year-to-date slide and a stock that sits closer to its low than its high, it will take more than polished exhibitions to shift the prevailing mood.