Rheinmetall's Industrial Momentum Builds as Stock Lags Ambition

Rheinmetall cuts steel for final naval vessel and secures key US cybersecurity certification, while ambitious 2026 targets and a new missile JV signal growth despite a lagging share price.

The steel for the third and final Class 424 fleet service boat was cut at the Peene shipyard in Wolgast on April 16, ahead of schedule. This early start formally concludes the construction phase for the entire naval program, a tangible sign that Rheinmetall is successfully accelerating its industrial output. The 130-meter-long vessels, equipped with advanced sensors for maritime intelligence, are set to replace the aging Oste-class ships for the German Navy.

This on-the-ground progress coincides with a pivotal strategic achievement across the Atlantic. Rheinmetall’s US subsidiary, American Rheinmetall, has secured the crucial Cybersecurity Maturity Model Certification (CMMC) Level 2. This certification, covering all six of the company's US production sites, was finalized after a February audit and involved implementing 110 specific cybersecurity controls. It is now a mandatory requirement for bidding on new contracts with the US Department of Defense, effectively granting Rheinmetall a key to the lucrative American defense market.

While production lines hum and strategic doors open, Rheinmetall's share price tells a contrasting story. The stock, trading around €1,497, sits roughly 25% below its autumn high and has declined approximately 6.5% since the start of the year. It remains below its 200-day moving average of about €1,691, with a Relative Strength Index of 38.5 indicating an oversold condition. This creates a notable disconnect with the company's operational advances.

Management's confidence for the coming years is underscored by ambitious financial targets. For the full 2026 fiscal year, the group forecasts sales to reach between €14.0 billion and €14.5 billion, representing growth of 40% to 45% over the prior year. The operating margin is projected at approximately 19%. A remarkably solid order book provides the foundation for this outlook, with existing contracts already securing 91% of the targeted annual revenue.

Beyond naval systems and US expansion, Rheinmetall is cultivating another major growth area. A recently announced joint venture with specialist Destinus, named "Rheinmetall Destinus Strike Systems," will begin producing cruise missiles and ballistic rocket artillery in Unterlüß in the second half of 2026. Rheinmetall holds a 51% stake in this venture, positioning itself directly in the high-demand segment of long-range precision strike systems.

Investor attention now turns to imminent financial updates for validation. The company will present its first-quarter figures on May 7, followed shortly by the Annual General Meeting in Düsseldorf. Shareholders at that meeting will vote on a proposed dividend increase to €11.50 per share. The upcoming earnings report may test whether the market begins to align its valuation with Rheinmetall's broadening strategic footprint and accelerating production pace.