Rheinmetall’s Insider Buying and Croatian Expansion Cement a Recovery, but €1,200 Decides the Next Leg

Insider purchases and a Croatian robotics deal lift Rheinmetall stock 15% from low, but execution risks and technical hurdles remain.

A string of insider purchases and a timely acquisition in eastern Europe have given Rheinmetall’s tumbling shares a much-needed lifeline. Chief executive Armin Papperger and other top managers scooped up stock worth millions in recent days, a move that market watchers often interpret as a signal the board sees its own equity as undervalued. The buying coincided with the completion of a majority stake in Croatian robotics specialist DOK-ING on 1 July, a deal that will see Rheinmetall build a centre for autonomous military vehicles in the region.

The stock responded with a sharp bounce. After plumbing a 52-week low of €902.50 on 25 June, the shares have clawed back more than 15% in seven trading sessions, reaching around €1,090 on Thursday. That leaves the defence group still 45% below its all-time high of €1,995 set in late September last year, but the speed of the rebound has raised hopes that a genuine floor may be forming.

Record orders, but a stubborn execution gap

Operationally, the case for Rheinmetall remains compelling. The order backlog swelled to a record €73 billion in the first quarter, up 32% year-on-year, with structural demand underpinned by Germany’s planned defence budget of €108 billion for 2026, the EU’s €800 billion ‘Rearm Europe’ programme, and a NATO spending target that is moving towards 3.5–5% of GDP. International contracts keep flowing: an unnamed client ordered the Skynex air-defence system, Romania placed a billion-euro order for Skyranger systems, and additional millions were booked for Ukrainian ammunition.

Yet the market has punished the company for failing to convert that backlog into revenue quickly enough. First-quarter sales of €1.938 billion missed the consensus estimate of roughly €2.3 billion by 15%, and the operating margin of 11.6% did little to offset the disappointment. On the day of the release the stock crashed 6.94%, and it lost another 6% the following session after a JPMorgan downgrade. The overhang of execution risk – can Rheinmetall actually deliver the hardware that governments have promised to buy? – has replaced the earlier euphoria that drove the share price toward €2,000.

Technical hurdles and political landmines

The chart offers little comfort. Rheinmetall is still trading 29% below its 200-day moving average of €1,542.95, and the 100-day average at €1,384.97 remains far overhead. The immediate test is the 50-day moving average at €1,203.09. A sustained move above that level would signal that the worst of the selling is over; failure would likely send the stock back towards the 52-week low.

The bounce has been driven partly by a recognition that the trigger for the sell-off – the German defence ministry’s halt to the billion-euro F126 frigate programme – may have been an overreaction. According to reports, the programme was never booked in Rheinmetall’s order books in the first place. The political risk remains real, though. A single government decision can still upend expectations, and any further delays to major procurement projects would test investor confidence.

Volatility remains extreme. The 30-day annualised reading of nearly 69% implies that sharp swings in both directions will continue, and the relative strength index at 45.7 sits in neutral territory, offering no clear directional signal. The bears point out that the long-term trend line is still pointing firmly down: as long as the 200-day average is 28% away, a genuine trend change has not begun.

Catalysts on the horizon

The next major milestone is the NATO summit, where fresh spending commitments could provide a catalyst. The NATO Defence Industry Forum, due next week, may produce concrete procurement announcements. Rheinmetall also faces a crucial earnings release on 6 August, when the first-half numbers will show whether the execution story is improving.

Until then, the €1,200 mark is the battleground. If the buyers who emerged at €902 can push the stock through that resistance, the recent insider purchases will look prescient. If the rally stalls, the market will be left wondering whether the recovery was just another dead-cat bounce in a broken uptrend.