Rheinmetall’s €73bn Order Book Can’t Stop the Bleeding as Shares Hit a New Low

Rheinmetall shares plunge 10% to a 52-week low as Q1 revenue misses forecasts, overshadowing a €73bn order backlog and expansion into shipyards and missiles.

The disconnect between Rheinmetall’s swelling order book and its sinking share price has rarely been starker. The defence group’s stock tumbled to a 52-week low of €1,208.60 on Friday, shedding 10.4% in a single session and leaving the year-to-date decline at roughly 25%. The sell-off came despite a record €73bn order backlog and a dividend hike that would make most industrial companies envious.

A Revenue Miss That Stung

The immediate trigger was a first-quarter revenue figure that fell short of analyst expectations. Rheinmetall reported sales of €1.9bn for the three months to March 31, against the €2.3bn consensus forecast compiled by Reuters. Management pointed to a familiar culprit: delivery delays. Military truck shipments have been held up, while production at the Spanish munitions plant in Murcia is running behind schedule. Both are expected to catch up in the coming months.

The operating picture was not all grim. Earnings before interest and tax climbed 17% to €224m, pushing the margin from 10.6% to 11.6%. But the market’s focus was squarely on the top-line miss, and the reaction was swift.

JPMorgan Pulls the Trigger

The revenue disappointment prompted JPMorgan to downgrade the stock from “Overweight” to “Neutral,” slashing its price target from €2,130 to €1,500. The bank argued that Rheinmetall has repeatedly fallen short of its own growth targets, eroding credibility. Bernstein took a more patient view, maintaining an “Outperform” rating with a €2,050 target, but analyst Adrien Rabier stressed that the company must convert its record order book into tangible revenue growth.

A Second Shipyard in the Crosshairs

Even as the stock took a beating, Rheinmetall continued to push ahead with its expansion strategy. The group has submitted a non-binding offer for German Naval Yards in Kiel, a 400-employee facility owned by France’s CMN Naval. The move follows the February acquisition of Lürssen’s naval vessels division, which contributed roughly €6bn to the order book.

CEO Armin Papperger has been blunt about the rationale: “We currently have only 50 to 60% of the capacity we need.” A due diligence process will now determine whether the offer becomes binding. But Rheinmetall is not alone in its interest. ThyssenKrupp Marine Systems has also tabled a bid, setting the stage for a competitive auction.

Missiles, Joint Ventures, and a €3bn Ambition

Alongside the shipyard push, Rheinmetall is expanding its missile business. The company plans to launch a joint venture with Dutch firm Destinus, called Rheinmetall Destinus Strike Systems, in the second half of 2026. Rheinmetall will hold a 51% stake, with production slated to begin by early 2027. Papperger sees annual revenue potential of €3bn from unmanned systems alone — €1bn each for land, air, and sea applications.

The Dividend and the Calendar

Shareholders have a near-term consolation prize. The company will propose a dividend of €11.50 per share for the 2025 financial year at its virtual annual general meeting on May 12, up from €8.10 the prior year. The ex-dividend date is May 13, with payment due on May 15.

The AGM will also serve as a platform for management to defend its strategy. The due diligence outcome for German Naval Yards and the second-quarter delivery catch-up in Spain will be the next major tests for a stock that has lost nearly a quarter of its value in 2026 alone.