Rheinmetall's CEO in the Crosshairs as Pay Soars and Shares Stumble

Rheinmetall CEO faces Russian threats as his pay soars. Stock struggles despite a record €63B backlog and bullish analyst targets ahead of key Q1 report.

The spotlight on Rheinmetall CEO Armin Papperger intensified this week, but for starkly contrasting reasons. While the head of the German defense giant saw his compensation skyrocket to €10.2 million for 2025, placing him sixth among DAX executives, he was simultaneously named a primary target for Russian influence operations and physical threats by German domestic intelligence. This unusual juxtaposition of personal reward and heightened risk underscores the volatile environment surrounding one of Europe's key armaments suppliers.

Thuringia's domestic intelligence chief, Stephan Kramer, issued a public warning on Sunday, stating Papperger is in the crosshairs. The alert follows the discovery of a Russian defense ministry list containing addresses of European arms manufacturers. Authorities report a significant escalation in cyber-attacks, espionage, and sabotage attempts against companies within the Ukraine supply chain, prompting calls for enhanced protective measures for leadership and critical infrastructure.

This geopolitical tension contributed to a nervous start to the trading week. Rheinmetall shares traded around €1,498, struggling below the psychologically important €1,500 level. The pressure was compounded by fresh uncertainty in the Middle East following Iranian attacks on commercial ships in the Gulf of Oman, which triggered new U.S. sanctions threats. The stock now sits roughly 25% below its 52-week high, languishing below all major moving averages and weighed down by bearish chart patterns including a death cross formed in December.

The market's skepticism persists despite a fundamentally robust operational picture. The company's order backlog stands at a record €63 billion. For the current fiscal year 2026, management is targeting revenue between €14.0 and €14.5 billion, representing growth of up to 45%, with an impressive 91% of that target already covered by existing contracts. The operating margin in the defense segment is approximately 18.5%, with a group target of around 19% for the year.

This strength is reflected in analyst sentiment. Goldman Sachs has placed the stock on its "European Conviction List" with a price target of €2,300. Morningstar awarded the equity a 5-star rating on April 17, citing a significant gap between the share price and its fair value estimate. The company is also expanding its footprint, showcasing production technologies for the defense industry on a 1,200-square-meter stand at the Hannover Messe this week, where Papperger is participating in a panel on AI and autonomous systems.

All eyes are now on the first-quarter report due on May 7, 2026, which will serve as a critical test. Analysts expect earnings per share of approximately €39 for the full year, a figure that would represent a surge of about 166% over 2025. The key question for investors is the pace at which the colossal order backlog converts into actual revenue and cash flow. Until the market sees convincing progress on that front, the disconnect between Rheinmetall's operational boom and its subdued share price is likely to remain.