Rheinmetall’s €20 Billion Q2 Order Pipeline Bolsters Barclays’ 2035 Euro Conviction

Barclays reiterates overweight on Rheinmetall with €2,035 target, citing a €20B pipeline and record order book. Stock down 18.6% in 30 days, but execution risks persist.

Rheinmetall’s share price has tumbled more than a fifth since January, but the Düsseldorf-based defence group is finding a powerful ally in Barclays. The British investment bank reiterated its “overweight” rating on Wednesday and slapped a €2,035 price target on the stock — implying upside of roughly 65% from current levels. Analyst Afonso Osorio argues the market has overcorrected, even as operational hiccups weighed on first-quarter revenue.

The stock rebounded 2.6% to €1,236.20 on the day, extending a weekly rally that now tops 10%. Yet the recovery remains fragile: at €1,202.60 a day earlier, the shares were still 18.6% lower over a 30-day stretch and nearly 40% below the 52-week high of €1,995 hit last September. The distance to the 200-day moving average, a technical yardstick, signals a 25% gap that charts read as a clear downtrend.

Barclays’ conviction rests not on a perfect recent showing but on a bulging pipeline. Chief executive Armin Papperger has flagged second-quarter “nominations” — contract awards in the pipeline — worth roughly €20 billion. Programmes under discussion include military vehicle orders in Romania and Italy, as well as the F126 frigate deal. If converted, these would align the order inflow with the broader investment narrative that Europe’s rearmament push makes Rheinmetall a structural winner.

The order book already stands at a record €73 billion inclusive of framework agreements, up from €56 billion a year earlier. That total now includes the Naval Systems segment added through the Lürssen marine division acquisition. For the full year, management holds to guidance of €14 billion to €14.5 billion in revenue and an operating margin of 19%. Barclays expects earnings before interest and tax to surge 45% in 2025, far outpacing the sector average of 19%.

Not every analyst shares that enthusiasm. On 15 May, Berenberg lowered its price target from €2,100 to €1,750, citing a weaker valuation backdrop and more cautious assumptions for large projects. The main bone of contention is the Boxer?Arminius programme, where Berenberg slashed its assumed contract value from €32 billion to €23 billion, tempering the scale of future growth expectations.

Execution remains the market’s central worry. First?quarter sales rose a modest 8% to €1.94 billion, partly because an unusually strong year?earlier period created a tough comparison. Chief financial officer Klaus Neumann and head of investor relations Dirk Winkels are set to address lingering delivery?risk doubts at Barclays’ European Leadership Conference in London this week. The bank sees that dialogue as a potential catalyst to break the recent pattern of disappointment.

Looking to the second half, Papperger sees further opportunities worth around €60 billion, largely from Arminius and procurement linked to Ukraine. For 2026, the group projects an order intake of roughly €80 billion. The next re?rating, therefore, hinges less on a short?term bounce than on how much of this pipeline hardens into firm contracts. The next hard deadline is 6 August, when second?quarter results will test whether the promised acceleration is real and supply chains are running smoothly.