Rheinmetall's Maritime Ambitions and Bundeswehr Mega-Deal Leave Investors Cold

Rheinmetall starts drone boat production, inks billion-euro loitering munition deal with Bundeswehr, and showcases robotics, but shares drop 1.75% amid market skepticism.

Rheinmetall is making bold moves on multiple fronts — launching serial production of drone boats in Hamburg, signing a billion-euro framework agreement with the Bundeswehr, and showcasing cutting-edge robotics in Hanover. Yet the defence group's share price continues to drift lower, leaving a yawning gap between corporate momentum and market sentiment.

From Land to Sea: Drone Boat Production Begins

The Düsseldorf-based company fired the starting gun on 20 April for series production of the K3 Scout, an unmanned surface vessel built at the historic Blohm+Voss shipyard in Hamburg. The move marks Rheinmetall's first direct foray into military shipbuilding, following the completion of its NVL acquisition in early March — a deal greenlit by the EU Commission in February.

The K3 Scout, developed through the Rheinmetall Kraken GmbH joint venture with UK-based Kraken Technology Group, measures 8.5 metres in length and weighs up to 2,500 kilograms. With a top speed of 55 knots — roughly 102 km/h — and a range of 650 nautical miles, the vessel is designed for both military and civilian applications. It currently operates via remote control, with autonomous capabilities planned for the future.

Initial production capacity stands at around 200 units annually, scalable to 1,000 units in three-shift operations — a ramp-up that could create up to 400 new jobs, according to NDR. Tim Wagner, division head, confirmed in March that orders from NATO countries are already in hand. Blohm+Voss is earmarked to become Germany's national centre of excellence for unmanned maritime systems.

Bundeswehr Signs Billion-Euro Loitering Munition Deal

Just two days later, on 22 April, Rheinmetall inked a framework agreement in Koblenz with the Bundeswehr for its FV-014 loitering munition, internally dubbed "Raider." The contract's total value runs into the billions, with an initial call-off worth approximately €300 million gross.

The FV-014 is an electrically powered drone weighing 20 kilograms, carrying a 4-kilogram warhead. It boasts a range of up to 100 kilometres and a flight endurance of 70 minutes. Rheinmetall produces the entire system within the EU.

Robotics on Display in Hanover

Alongside these defence contracts, Rheinmetall is showcasing civilian applications at the Hanover Messe, which runs until the end of the week. The centrepiece is a teleoperation solution developed with MIRA GmbH, allowing an operator in Hanover to control vehicles in Düsseldorf in real time.

From May, a teleoperated shuttle will begin a pilot service connecting Düsseldorf airport's train station with the terminal, operated in partnership with Rheinbahn AG. Also on display is the YARO Cobot from YardStick Robotics, designed for hazardous and dirty work environments.

Market Remains Unimpressed

Despite the flurry of activity, Rheinmetall's shares continue to slide. The stock traded at around €1,402 on 22 April, down roughly 1.75 percent on the day. Since the start of the year, the shares have lost nearly 12.5 percent and sit more than 10 percent below their 50-day moving average of €1,562.

Jefferies recently lifted its price target to €2,220 from €2,020, maintaining a "Buy" rating. The investment bank's rationale is grounded in concrete order coverage: over 90 percent of Rheinmetall's targeted 2026 revenue of €14 billion to €14.5 billion is already secured. The operating margin is expected to climb to around 19 percent. With the current share price roughly 58 percent below that target, the valuation gap is stark.

The analyst also noted that land defence companies now offer the most attractive valuations following a sharp correction, while downgrading Safran and Leonardo to "Hold."

What's Next

Rheinmetall is scheduled to release its first-quarter 2026 results on 7 May, followed by the annual general meeting in Düsseldorf on 12 May. On the agenda: a dividend of €11.50 per share, representing a roughly 42 percent increase year-on-year. Management's full-year guidance calls for group revenue of €14 billion to €14.5 billion — growth of 40 to 45 percent versus 2025.

Whether the market's scepticism will yield to the weight of orders and production milestones may become clearer when the Q1 numbers land. For now, Rheinmetall's strategic transformation is advancing at pace — but its share price has yet to catch up.