Rheinmetall's Order Book Swells as Brokers Trim Their Targets

Rheinmetall has spent the past week proving it can win contracts and sign cheques. Convincing the market that either will translate into near-term earnings is proving harder.

Berenberg cut its price target on the Düsseldorf-based defence group on Tuesday to 900 EUR from 1,020 EUR, keeping its rating at "Hold." The revision landed alongside a reminder of just how far the stock has drifted from the sell side's models: Rheinmetall shares closed Friday at 766.00 €, down 0.8% on the day and below both Berenberg's new target and the 1,000 EUR mark retained by Bernstein Research, which reiterated its "Market-Perform" rating the same session. Analyst Adrien Rabier flagged the possibility of delays to, or a reduced scope for, the F127 frigate programme.

The muted share price reaction follows a second downward revision to full-year guidance in early November. Revenue is now expected at around 13.2 billion EUR, against a prior range of 13.7–14.2 billion EUR. Rheinmetall also guided the operating margin to roughly 18.5%, down from about 19%, and slashed its cash-conversion forecast to just above 0% from more than 40%. Management attributed the shortfall to delays on the Bundeswehr's Arminius project and to the acceptance of artillery ammunition.

Belgium Signs for Skyranger

On the order front, the news has been brighter. Belgium has commissioned 20 Skyranger 30 air-defence systems, a package that includes associated logistics support. Rheinmetall values the contract in the mid-three-digit million-euro range, with deliveries scheduled to begin at the end of 2028 — a start date well beyond the signing of the deal.

The company's real estate arm has also closed a transaction. Rheinmetall Real Estate Romania has paid the full purchase price of 138.03 million EUR for assets of the Mangalia shipyard, according to insolvency administrator CITR, which disclosed the completion on Tuesday. The seller of the assets is the yard company itself.

Taken together, the two developments sketch a group still expanding its industrial footprint and backlog while its near-term financials lag the ambitions behind them. The gap between order intake and cash generation is precisely what the trimmed guidance now reflects — and what the brokers are pricing into their targets.