Rheinmetall Faces Its Toughest Audience Yet: Investors Who Have Seen the Stock Halve

Rheinmetall seeks to convince investors its €80.5B order book will drive profitable growth, as shares remain 42% off record high.

The defence contractor walking into the DZ Bank "Expert Day" in Bremen on Thursday is not the same company that wowed markets last autumn. Rheinmetall's shares have shed nearly half their value since touching a record €2,007.00 in October 2025, and the stock is down 24 percent since the turn of the year. That leaves management with a delicate task: convince institutional investors that a swelling order book — now worth roughly €80.5 billion — will translate into the kind of profitable revenue growth that justifies a recovery.

The market's mood was cautiously improved on the day itself, with the shares climbing 2.3 percent to €1,172.20, building on the previous session's close of €1,146.00. But the bounce masks a deeper tension. The stock sits 17 percent below its 200-day moving average of €1,417.75, a technical signal that the medium-term trend remains bruised and vulnerable to fresh selling pressure.

A Pipeline That Keeps Growing

The timing of the Bremen event is no accident. Rheinmetall arrives armed with a string of recent contract announcements that, taken together, paint a picture of a company executing on multiple fronts. The Bundeswehr's procurement agency BAIUDBw issued the first call-off under the Lithuania framework agreement on Tuesday — a modular camp for 2,000 soldiers worth €250 million to build, plus roughly €40 million a year in operating revenue starting from August 2027. That adds a recurring-revenue layer to a portfolio increasingly built on long-term commitments.

The momentum predates this week. Mid-August brought a follow-on order for mobile rescue stations valued at over €500 million, and the group has been busy on the technology front too. A joint demonstration with Hensoldt around a week ago showcased the integration of passive sensor technology into a modern air defence system, while a new competence centre for autonomous systems in Britain is designed to deepen collaboration with Canada.

Media reports suggest the order book could surpass €100 billion by the end of fiscal 2026 — a milestone that would dwarf the current €80.5 billion figure and give management a powerful narrative for the Bremen stage.

The Bull and Bear Case, Side by Side

For optimists, the logic is straightforward. RBC Capital Markets initiated coverage on 13 August with an "Outperform" rating and a price target of €1,600, citing Rheinmetall's strong positioning in European rearmament themes and growing cash flow. The stock's 7.2 percent cushion above its 50-day average of €1,093.42 suggests short-term stabilisation, and a credible commitment to margin expansion in Bremen could provide the catalyst the market has been waiting for.

The bearish counter-argument is equally clear. Every new site investment — the €260 million "Defence Hub Nordhessen" in Kassel-Calden being the latest example — ties up capital before it generates returns. If management dwells on future investment needs rather than concrete margin targets, investors may conclude that the enormous backlog is proving harder to convert into cash flow than anticipated. The RLMV joint venture with Leonardo, reportedly set to produce 1,322 vehicles for Italy, remains an announcement with initial deliveries rather than a signed contract with secured revenue contribution.

Analyst sentiment reflects this divide. Jefferies' Chloe Lemarie raised her price target from €1,300 to €1,350 in mid-August while maintaining a buy recommendation after reviewing second-quarter numbers. JPMorgan's David Perry, by contrast, stayed at "Neutral" with a €1,350 target, acknowledging strong quarterly results but flagging uncertainty around revenue forecasts for 2027 through 2030.

What Bremen Must Deliver

The immediate test is today's presentation itself. If the board can back up its guidance with credible numbers, the market may finally find the catalyst it has sought since the share price began its long slide. If not, the stock could quickly slip back toward the moving averages that currently sit below the trading level.

A further opportunity for management to press its case arrives on 1 September at the Berenberg Stockholm Seminar, where Rheinmetall will again address institutional investors. The gap between operational momentum and a share price that remains 42 percent off its 52-week high suggests the market has yet to fully price in the long-term story. Whether Bremen changes that calculus depends on how convincingly the company can argue that its backlog is not just growing — but becoming profitable.