Rheinmetall Wins Fresh Artillery Order as Fourth Navy Vessel Moves Toward Parliament

Germany plans a fourth Class 424 fleet service boat as Rheinmetall books a low triple-digit million-euro artillery shell order from an international buyer.

Rheinmetall's week began with progress on two fronts at once. On Monday, German Defence Minister Pistorius announced plans to procure a fourth Class 424 fleet service boat for the Bundesmarine during a visit to the Peene shipyard in Wolgast — a site that has belonged to the Düsseldorf-based defence group since March 2026. In parallel, the company booked another artillery ammunition order from an international customer.

A larger reconnaissance fleet takes shape

Pistorius used the keel-laying of the third fleet service boat to signal the next step. That ceremony took place months ahead of the original schedule, with a second sister vessel already under construction alongside it at the yard. According to the minister, four units are needed, and the paperwork for the fourth boat is now headed into parliamentary deliberations.

The roughly 130-meter specialist vessels are slated to replace the existing boats "Oker," "Oste" and "Alster" from 2029 onward. Final outfitting is planned at Blohm+Voss in Hamburg. For the first three ships plus an associated training facility, the Bundestag approved funds of up to EUR 3.26 billion back in 2023. Around 400 employees work at the Peene yard, which Rheinmetall took over roughly six months ago.

Shell production lines stay busy

On the munitions side, an unnamed international buyer placed an order for 155-millimeter artillery shells in a low five-figure quantity. The contract carries a value in the low triple-digit million-euro range and will be booked in the third quarter of 2026. Manufacturing has already started, with deliveries and final completion of the units scheduled for 2027.

The deal underscores how fully the production lines remain loaded. Rheinmetall chief Papperger stressed the scale of the capacity expansion at a recent global security summit: annual output of artillery ammunition has been lifted from 70,000 rounds to one million. By 2030, the group is targeting roughly 1.5 million 155mm shells per year. To support that build-out, Rheinmetall has invested around half a billion euros in a new plant, among other measures.

Guidance trimmed after a powerful second quarter

The latest order intake builds on an operationally strong year in which management adjusted its targets. In the second quarter of 2026, Rheinmetall posted revenue of EUR 3,289 million, a jump of 69 percent from EUR 1,949 million a year earlier. Operating profit more than doubled over the same stretch, climbing 115 percent to EUR 562 million, while the operating margin reached 17.1 percent, up from 13.4 percent in the prior-year quarter.

At the same time, the executive board revised its full-year 2026 sales forecast downward by EUR 300 million in early August, setting a range of EUR 13.7 billion to EUR 14.2 billion. The trigger was the cancellation of the F126 frigate naval program. The target for the full-year operating margin remains unchanged at around 19 percent.

Shares hold just above the four-figure line

The fresh ammunition contract helped steady sentiment in the market. In pre-market trading the stock changed hands at EUR 1,003.60, a modest gain of 0.6 percent, allowing it to remain just above the psychologically important EUR 1,000 mark after closing the regular session the previous day at EUR 998.00. On Monday, the shares had finished Xetra trading up 0.7 percent at EUR 998.00.

Longer-term valuations still reflect the recent corrections across the sector. Since the start of the year, the stock has shed 35 percent, and it sits 50 percent below its 52-week high of EUR 2,007.00. Against that backdrop, market watchers are focusing more intently on how steadily the company works through its order backlog and whether it can hit its ambitious production targets on schedule.