Rheinmetall's Great Divide: A Record Order Book Wrestling With a Stubborn Share Price

Rheinmetall's record €63.8B order book and 29% revenue growth contrast with shares down 11% in a month, trading near €1,000 amid valuation concerns and F126 cancellation.

There is a peculiar disconnect playing out at Rheinmetall right now. The numbers coming out of the Düsseldorf-based defence group tell a story of a company firing on all cylinders — record order intake, double-digit growth across the board, and a pipeline that stretches years into the future. The share price, however, is telling a rather different tale.

At last check, the stock was changing hands at €1,042.00, having briefly slipped below the psychologically significant €1,000 mark. Over the past month alone, the equity has shed 11 percent, and it now sits roughly 49 percent below the 52-week high of just over €2,007 reached in October 2025. The current price also runs about 5.1 percent beneath its 50-day moving average — technical evidence of the persistent weakness that has gripped the shares.

The Numbers Behind the Narrative

The full-year 2025 results, published recently, make for impressive reading. Revenue climbed 29 percent to €9.9 billion, while operating profit jumped 33 percent to €1.8 billion. Net income came in at €0.8 billion, a more modest 3 percent advance. Looking ahead, management has guided for revenue growth of between 40 and 45 percent in 2026.

Perhaps the most striking figure, though, is the order book. At €63.8 billion, it stands at an all-time high — a multiple of annual sales that provides rare long-term visibility in an industry where visibility is already considered a virtue. Reports suggest the expected order volume for Rheinmetall alone could exceed €100 billion, with more than €25 billion attributable to TKMS, the subsidiary and partner company. That latter figure includes a €6.3 billion contract for four MEKO A-200 frigates for the German navy.

A €270 Million Bet on Kassel

Against this backdrop of expansion, the group has unveiled a substantial investment programme aimed at transforming its Kassel site into what it calls a "Defence Hub Nordhessen." Roughly €270 million is earmarked for the location, according to reports from Börsen-Zeitung, Handelsblatt and FAZ. The plans encompass an expansion of the armoured vehicle plant, the construction of a drone testing centre at Calden airport, and a new logistics facility spanning 30,000 square metres.

The ambition is considerable. Site revenue is projected to grow from €1.5 billion in 2026 to €5 billion by 2029, with annual production of 500 Boxer vehicles targeted from that year onwards. Staffing levels in Kassel are expected to rise from approximately 2,200 today to around 3,500. The investment lands at a moment when the group is simultaneously booking a series of international contracts.

North American Momentum

The transatlantic business, in particular, is gathering pace. American Rheinmetall confirmed on 1 September the delivery of the first of eight Lynx XM30 prototypes to the U.S. Army. The vehicle now enters development and performance testing under Phase 3/4 of the programme. The underlying contract is valued at roughly $764 million, or approximately €660 million, with the remaining seven prototypes slated for delivery before year-end.

Meanwhile, Rheinmetall Canada received an order from the U.S. Navy in early September for replacement components for MSU-200NAV mobile launcher systems. The contract value sits in the single-digit millions of euros, with deliveries scheduled through to the end of 2028. A separate, smaller award — around $710,000 — sees the group manufacturing components for MCT-30 turrets used in the ACV-30 vehicle of the U.S. Marine Corps, with production taking place in Michigan and deliveries spread across 2026 and 2027.

The F126 Shadow

Yet for all the operational momentum, a cancelled flagship programme continues to weigh on sentiment. The F126 frigate project was halted in June after Dutch partner Damen Schelde failed to meet its time and cost commitments. Costs had ballooned to nearly €13 billion, of which €2.4 billion had already been spent. The Bundeswehr's decision to scrap the programme — estimated to have been worth around €12 billion to Rheinmetall — was a significant blow.

TKMS's MEKO A-200 concept has emerged as the replacement, though at a higher unit cost of €1.6 billion per vessel compared with roughly €1 billion previously. The decision leaves the Peene shipyard in Wolgast, which employs around 400 people and is owned by Rheinmetall, facing an uncertain future as the group evaluates alternatives.

A Question of Valuation

The market's scepticism may ultimately come down to price. Even after the substantial pullback, analysts point to an expected price-to-earnings ratio of roughly 32.5 for 2026 — a level that, in their view, still suggests the stock is richly valued. The August cut to full-year guidance, announced despite record second-quarter sales and margins, triggered a sharp sell-off from which the shares have yet to recover.

A €250 million Bundeswehr contract for a modular camp in Lithuania, announced in late August, has done little to shift the mood, despite the additional €40 million in annual operating costs it brings.

There is also a quieter concern emerging around critical raw materials. Niobium, a metal whose production is heavily concentrated in Brazil, is increasingly viewed as a potential bottleneck for the defence industry as a whole. For Rheinmetall specifically, this is not yet an acute operational issue, but the discussion underscores how supply chains and geopolitical dependencies are becoming intertwined with the sector's growth trajectory.

The picture for investors, then, is one of contrasts. A record order book, double-digit growth and ambitious expansion plans on one side; a demanding valuation, project-specific setbacks and a share price that refuses to reflect the operational reality on the other. The €1,000 level looks set to remain a key psychological reference point in the near term.