Rheinmetall's Order Book Keeps Growing While the Market Demands Proof

Rheinmetall booked a low three-digit million-euro order for 155-mm artillery shells, adding to a backlog above EUR 80 billion amid trimmed guidance.

Fresh demand for large-caliber ammunition landed at Rheinmetall on Thursday, with an international customer placing an order for 155-mm artillery shells worth a low three-digit million-euro sum. The package covers delivery of a five-figure quantity of the sought-after rounds, adding another entry to a munitions backlog that has become one of the Düsseldorf group's most dependable revenue engines.

It follows a comparable booking secured on September 18 for artillery shells of the same caliber, also sized in the low three-digit million-euro range, with completion scheduled by the end of 2027. Together the two contracts underscore how sustained demand for conventional ammunition continues to underpin the company's operating business.

A Record Backlog Meets Trimmed Guidance

Those order wins sit alongside a mixed fundamental picture. Rheinmetall turned over EUR 3.289 billion in the second quarter of 2026, a jump of 69 percent from the same period a year earlier, while operating profit climbed 115 percent to EUR 562 million and the operating margin reached 17.1 percent. The total order backlog last stood above EUR 80 billion.

Management's revisions to its full-year targets have nonetheless weighed on sentiment. The company is targeting an operating margin of roughly 19 percent, and has flagged a markedly negative operating free cash flow for the current fiscal year.

Naval Maintenance Contract and Specialty Investments

Away from the ammunition headlines, Rheinmetall said Wednesday that its Naval Systems division had signed a multi-year framework agreement with Germany's General Customs Directorate covering maintenance and repair work on four new LNG customs vessels. The arrangement includes routine inspections, technical troubleshooting support and an emergency service during operations. Neither partner disclosed a financial volume.

Progress is also being made in the group's specialty businesses. Subsidiary Pierburg Pump Technology received roughly EUR 1.5 million in funding to develop industrial production processes for NanoLam capacitors, with total investments of more than EUR 4.4 million planned at the site.

Elsewhere, Rheinmetall Electronics and Rheinmetall Landsysteme reported advances on equipment programs for infantry forces. A new training device for marksmanship and combat instruction on the schwerer Waffenträger Infanterie passed its official factory acceptance test. The group also took part in NATO's REPMUS26 exercise in Portugal, where networked unmanned systems for protecting maritime infrastructure took center stage; a deployable, containerized Rheinmetall system served as the operations center for the German Navy during the maneuver.

Shares Stay Under Pressure

Investors, though, are focused less on contract announcements than on how quickly the filled order books convert into booked revenue. MWB Research noted that after the record intake of recent quarters, the market is now assigning greater weight to actual execution. Traders are demanding evidence that the company can turn its large commitments into countable sales on a timely basis.

European defense stocks more broadly have come under heightened selling pressure. Rheinmetall shed 3.8 percent on Thursday, a session in which dpa-AFX cited growing uncertainty over geopolitical conflicts and state rearmament programs, as well as elevated oil prices, as drags on the sector.

At the start of the new trading week the stock was down 1.6 percent at EUR 969.90, while a separate reading put the shares 1.4 percent weaker at EUR 971.70. The equity remains far below earlier peaks, sitting 52 percent beneath its 52-week high of EUR 2,007.00, and has lost 38 percent since the beginning of the year. The steady flow of munitions orders demonstrates that armed forces' requirements remain intact — but for now, that demand is being offset by the burden of the lowered annual targets.