Rheinmetall’s Twin Production Drives Aim to Anchor Recovery as Citi Turns Buyer

Rheinmetall secures over €1B Bundeswehr truck order and enters mass production of precision missiles, while shares bounce 4.57% on Citigroup upgrade to Buy with €1,408 target.

Rheinmetall is pushing ahead with two large-scale manufacturing programs that cover the entire defence spectrum — from battlefield logistics to strategic strike — just as its shares try to shake off a brutal sell-off. The Düsseldorf-based group stands to secure an order for more than 2,000 military trucks from the German defence ministry, while simultaneously moving into mass production of a long-range precision missile system with a Dutch partner.

The stock has been clawing back ground after plunging roughly 45% from its 52-week peak of €1,995. It traded at €1,175.20 on Monday, a gain of 4.57% from Friday’s close of €1,123.80, and led the European defence sector higher. That bounce coincided with an upgrade from Citigroup, which lifted its rating on Rheinmetall from Neutral to Buy with a new price target of €1,408.

Analyst Charles Armitage argued the recent correction was overdone. Russia remains a structural threat to Europe regardless of the trajectory of the war in Ukraine, he said, and countries such as Germany and Sweden have scope to raise borrowing for defence spending — providing long-term support for the sector.

The recovery is real, but technical indicators suggest caution: the relative strength index hit 93, signalling the stock is overbought in the near term. Whether the share price can hold sustainably above €1,100 will determine if the downtrend of recent weeks is broken.

Berlin Throws Another Billion-Euro Truck Order into the Pipeline

The clearest near-term catalyst is a fourth call-off from an existing framework contract with the Bundeswehr. The defence ministry plans to purchase 2,030 additional military trucks from Rheinmetall MAN Military Vehicles (RMMV), the joint venture owned jointly by Rheinmetall and MAN from the Volkswagen Group. The contract value exceeds €1 billion, and the delivery deadline is tight: all vehicles must be handed over by November 2026.

The broader framework covers up to 6,500 trucks. With the current call-off, the number of firmly ordered vehicles will rise to around 3,430. The goal is to strengthen the Bundeswehr’s logistics and mobility for national and alliance defence — less glamorous than tanks or drone defences, but a core business for Rheinmetall with predictable demand.

What makes the deal especially attractive is a second revenue component. The ministry is budgeting for operating costs over 15 years that are similar in magnitude to the purchase price. That means Rheinmetall can lock in service revenue long after the vehicles are delivered, stabilising its defence division when other programmes fluctuate.

Rheinmetall’s first-quarter 2026 earnings showed the underlying operational momentum: earnings per share rose to €2.42 from €1.92 a year earlier, on revenue of €1.94 billion. For the full year, analysts on average expect EPS of €38.08. The truck order alone won’t shoulder that expectation, but it illustrates how deeply Bundeswehr procurement is now embedded in the order book.

Long-Range Missile Programme Targets Serial Production

The second industrial push comes from a partnership with the Dutch company Destinus. The two have established a joint venture called Rheinmetall Destinus Strike Systems, in which Rheinmetall holds 51% and Destinus 49%. Their goal is serial mass production of the “RUTA Block 3” precision-strike system, designed to hit targets up to 2,000 kilometres away.

Production is to be spread across multiple sites. The design work is done in the Netherlands; components and testing are located in Ukraine; final assembly takes place at Rheinmetall’s facility in Unterlüß, Germany. The first missiles are scheduled to roll off the line there by the end of 2026. The system uses a T220 turbojet engine and a warhead weighing 250 kilograms.

The partners estimate the annual market potential in the billions of euros. Rheinmetall is betting that the combination of a proven turbojet engine, a medium-sized warhead and a long range will appeal to European militaries urgently restocking their arsenals.

Next Steps and Market Reaction

For the truck order, the next milestone is approval by the Bundestag’s budget committee. Once that clears, the focus will shift to execution. If RMMV meets the November 2026 delivery schedule, Rheinmetall can convert the call-off into visible revenue quickly.

The stock’s Monday advance was the strongest in the sector. Renk rose 1.8%, Saab gained 2.0% on its own Citigroup upgrade to Neutral, while Hensoldt and TKMS posted smaller gains. Rheinmetall’s week-on-week performance still shows a modest plus of 1.34% over seven days — a sign that the selling pressure is easing, even if the shares remain 41% below their record high.