Rheinmetall’s Record €73 Billion Backlog Fails to Halt a 36% Slide as ILA and Telekom Pact Offer a Fresh Narrative

Rheinmetall's transformation into a pure-play arms maker is complete, but shares have lost 37% over 12 months. Record €73B order book and buy ratings fail to halt decline as market awaits catalysts like ILA Berlin.

The defence heavyweight’s transformation into a pure-play arms maker is now complete, yet the stock continues to bleed. Rheinmetall closed Friday at €1,190, some 40% below the 52-week high of €1,995 touched in September 2025. Over twelve months the shares have lost nearly 37% of their value, and the year-to-date deficit stands at roughly 26%. A market capitalisation of €55 billion has offered no shield.

The operational picture tells a very different story. The order book has swollen to a record €73 billion, buoyed by the structural rearmament of Europe. Two new Bundeswehr procurements are expected to go before parliament before the summer recess: 35 Fuchs “Schakal” armoured reconnaissance vehicles worth around €650 million, and 23 “Büffel” recovery vehicles priced at about €360 million – the latter to replace equipment donated to Ukraine. A €5.7 billion framework agreement with Romania further bolsters the long-term revenue outlook. Analysts at Morningstar, Deutsche Bank, UBS and Jefferies all maintain buy ratings, with Morningstar’s Loredana Muharremi pegging fair value at €2,380 – almost double the current quote.

Yet the market is now asking questions that a bloated order book alone cannot answer. The relative strength index sits at 39.6, signalling mildly oversold conditions without a clear reversal in sight. The stock trades well below both its 50-day moving average of €1,344 and its 200-day line of €1,620. Annualised volatility of nearly 52% underscores the political and growth-driven nature of this name. Earlier this year, the company completed the sale of its Power Systems division to AEQUITA for €350 million – a deal that turned Rheinmetall into the only DAX-listed group fully focused on defence. The automotive unit, which generated roughly €2 billion in revenue in 2025, will transfer with all 6,250 employees and a three-year site guarantee; closure is expected in the fourth quarter of 2026, subject to regulatory approvals. CEO Armin Papperger called the move historic, and he is not wrong. But shedding the legacy civil business has not, by itself, arrested the share price decline.

The next catalyst is the ILA Berlin air show, running 10–14 June. Rheinmetall plans a broad presentation that includes loitering munitions, the Skyranger 30 air-defence system, drones and satellite capabilities. The narrative the company wants to sell is one of networked warfare – “from sensor to shooter” – rather than mere platform supply. That pitch is being reinforced by a parallel announcement: Rheinmetall and Deutsche Telekom are planning joint solutions to protect critical infrastructure against drones and sabotage, covering airports, ports, power grids and whole urban areas. The details are still thin, but the signal is clear. The old story of a pure defence-budget beneficiary is giving way to a broader concept of infrastructure resilience.

The ILA appearance coincides with speculation that Rheinmetall could enter the naval sector for the first time, with talk of a possible acquisition of Kiel-based German Naval Yards, a prize also linked to TKMS. Should that materialise, the company would add a maritime dimension to its land and air domains. The next hard financial check comes with half-year results on 6 August. Until then, the market’s focus is on whether Rheinmetall can convince investors that its execution, margins and cash conversion match the scale of its order intake. The early self-evident tailwind from rising defence budgets has faded. What remains is a test of credibility – and the ILA stage could decide whether the stock finds a floor or continues its slide.