Rheinmetall's €80.5bn Backlog Can't Shield It From Delivery Delays and a Halved Share Price

Rheinmetall's Twinvis integration succeeds, but shares fall 2.6% amid Bundeswehr delivery delays and US tungsten export ban, pressuring 2026 outlook.

The disconnect between Rheinmetall's operational momentum and its stock market performance is becoming harder to ignore. On the same day the Düsseldorf-based defence group showcased a breakthrough in digital air defence alongside Hensoldt, its shares closed 2.6% lower at €1,180.00 — a reminder that order books, however swollen, do not automatically translate into investor enthusiasm.

Twinvis Integration Passes the Test, the Market Stays Unmoved

During the Luftwaffe exercise "Timber Express 2026", Rheinmetall and Hensoldt successfully integrated the latter's Twinvis passive radar into Rheinmetall's command-and-control system, feeding a real-time air picture directly into the battlefield management architecture. Because passive sensors emit no signals of their own, they are significantly harder for adversaries to detect — a quality that makes the integration a meaningful step forward for networked warfare capabilities.

For Rheinmetall, the demonstration reinforced its credentials in system integration and ground-based air defence. Yet the market response was muted at best, with the stock slipping to €1,180.00 by Wednesday's close, leaving it 24% lower since the start of the year and roughly 18% below its 200-day moving average.

Delivery Schedules Slip on Two Key Army Programmes

The share price weakness comes against a backdrop of delivery delays that have drawn criticism from the Bundeswehr. According to Capital magazine, the Schwerer Waffenträger Infanterie programme — a contract for 123 wheeled armoured vehicles worth €2.7 billion — is running at least eleven months behind schedule. Separately, the Skyranger 30 air defence system is now expected to begin deliveries in mid-2027 rather than mid-2026.

Rheinmetall contests the severity of these setbacks. The company maintains that series delivery of Skyranger 30 is delayed by only five months, and points to plans for 24 additional vehicles to be supplied by the end of 2026. Still, the friction highlights the operational strain of scaling up production to meet surging European defence demand.

Wolfram Export Ban Adds a Raw Materials Headache

Compounding the delivery issues is a fresh supply chain challenge: the United States is blocking exports of tungsten scrap for one year starting 27 August, a key input for ammunition production. Rheinmetall is currently building a propellant powder plant in Aschau with capacity exceeding one million propellant charge modules — an expansion that underscores how exposed the group remains to international supply chains.

To mitigate the risk, Rheinmetall is leaning on alternative suppliers, including Almonty in South Korea and long-time partner Plansee, which recently extended its supply agreement to 21 years. The broader industry pressure is evident in Washington too: the Pentagon has been pursuing an executive order since July to trace defence supply chains, with a 1 January 2027 deadline banning procurement from China, Russia, Iran and North Korea.

Record Order Book Tells a Different Story

The operational picture is not uniformly bleak. Rheinmetall's first-half results show revenue climbing 39% to €5.2 billion, while operating profit surged 74% to €786 million. Earnings per share from continuing operations rose to €8.43, up from €4.69 a year earlier.

The group's order backlog stood at roughly €80.5 billion as of 30 June 2026, a 44% increase year-on-year. The Vehicle Systems segment alone contributed €28.8 billion, up 41%. That pipeline provides multi-year planning certainty — and helps explain why some observers see value in the shares at current levels.

Analysts Split on Valuation

Morningstar counts Rheinmetall among candidates with significant upside to fair value, noting the stock has more than halved from its highs. JPMorgan, by contrast, remains cautious, reiterating a "Neutral" rating with a €1,350 price target. Analyst David Perry points to revenue risks for 2027 through 2030, which the current delivery delays may foreshadow.

The share price has been on a wild ride: from a 52-week high of €2,007.00 in early October, it has nearly halved, though it has recovered around 30% from its late-June low of €902.50. On Thursday, the stock traded at €1,176.00, marginally below the prior session's close.

A Mixed Picture for Investors

Even as delays mount on land vehicle programmes, Rheinmetall recently secured a Bundeswehr contract for mobile rescue stations worth more than €500 million — evidence that the group remains a preferred partner despite criticism of individual projects. The net impression for investors is one of competing forces: near-term sentiment is weighed down by delivery slippage and raw material constraints, while structural demand for defence equipment stays robust.

Whether the current recovery from the lows holds will depend largely on how quickly Rheinmetall can convert its announced catch-up deliveries into actual hardware on the ground.