Rheinmetall Stock: Analysts Slash Price Targets but Stand by Buy Ratings Amid €12.8B Warship Bid and Legal Cloud

Rheinmetall shares trade near €1,222, 39% below all-time high, as Jefferies and UBS cut targets but keep buys. Record €73bn order book, F126 frigate bid, and Iveco military vehicle talks offer catalysts.

Rheinmetall’s shares are trading nearly 39% below last year’s all-time high of €1,995, even as the defence contractor sits on a record order book worth €73 billion. The gap between analyst conviction and market sentiment has rarely been wider. Over the past 48 hours, two major banks have slashed their price targets — Jefferies and UBS — yet both maintain buy recommendations, arguing the sell-off has gone too far.

Jefferies analyst Chloe Lemarie reduced her target from €2,220 to €1,890, citing rising execution risks on large-scale projects. She dismissed concerns about the fundamental relevance of Rheinmetall’s products and described the current share price as an attractive entry point. UBS analyst Sven Weier went further, cutting his target from €2,200 to €1,600 — a 27% reduction — while also sticking with a "Buy" rating. Weier argued the market is underestimating growth potential in ammunition and the Boxer vehicle programme. Barclays, the third house to weigh in, kept its target unchanged at €2,035 with an "Overweight" rating.

The stock closed Friday at €1,221.60, up 0.46% on the day and roughly 9% higher than the 52-week low of €1,118 hit on 13 May. The weekly gain came in at around 9%, but on a year-to-date basis the shares have lost nearly 24% and more than 31% over the past twelve months. Technically, the relative strength index (RSI) of 85.6 points to overbought conditions, while the stock trades 25% below its 200-day moving average.

Management spent the week on a roadshow in New York and London, pitching the investment case to institutional investors. A near-term catalyst could come from the F126 frigate programme. Rheinmetall has submitted a €12.8 billion bid to rescue the project, and a confirmation as the lead contractor — potentially before the end of this quarter — would challenge the prevailing downtrend.

On the strategic front, the group is reported to be circling Iveco’s military vehicle division, with the Agnelli family in talks over a partial sale. A deal would bolster Rheinmetall’s position in European land defence systems, and the balance sheet — supported by a €73 billion order backlog as of the first quarter — provides ample firepower. However, a legal headwind is brewing. Germany’s Higher Regional Court in Düsseldorf has declared parts of the Bundeswehr procurement acceleration law unconstitutional, and the Federal Constitutional Court must now rule on the matter. Any outcome that undermines planning certainty for big-ticket projects would add to the risks analysts have already flagged.

Operationally, the group reiterated its full-year guidance: revenue between €14 billion and €14.5 billion, with an operating margin of 19%. Roughly 97% of planned sales are already under contract, and management aims to push the order backlog to €135 billion by year-end. The next quarterly figures are due on 6 August 2026, but until then, new contract announcements tied to European defence initiatives are likely to drive the narrative.