Rheinmetall's Ghost Bat Consortium Gears Up for 2029 as the Stock Remains Stuck in a Downdraft

Boeing unveils expanded German team for MQ-28 drone at ILA Berlin, but Rheinmetall shares stay flat amid sector headwinds and lack of concrete orders.

The curtain went up on the ILA Berlin air show this week with Boeing unveiling an expanded German team for the MQ-28 Ghost Bat project, placing Rheinmetall at the centre of a push into networked air combat. Yet by Wednesday’s close, the defence group’s shares were barely stirring at €1,195.80 – a stark reminder that industrial positioning and market reality are currently operating on different flight paths.

Diehl Defence and Rohde & Schwarz have been formally added to the consortium, each with a well-defined role. Diehl will oversee weapon integration and technical support, while Rohde & Schwarz is tasked with linking mission and communications systems to Bundeswehr command-and-control architectures. Rheinmetall keeps the linchpin function: system integration and national system management, adapting, maintaining and supporting the platform to German specifications.

Boeing Australia originally developed the MQ-28 as a Collaborative Combat Aircraft designed to fly alongside manned fighters. The drone’s roadmap now includes a 25 per cent larger wing, beyond-line-of-sight communications and internal weapons bays. Maximum take-off weight climbs to 12,000 pounds (roughly 5,443 kilograms) and payload capacity surpasses 4,500 pounds (2,041 kilograms). Both Rheinmetall and Boeing have set 2029 as the target for delivery to the Luftwaffe, giving the consortium a clear – and tight – deadline to reach bid readiness.

However, no order values or production volumes were disclosed. The announcement underscores industrial ambition, not contracted revenue, and the stock market has taken note. Rheinmetall’s shares have shed roughly a quarter of their value since the start of the year and now trade 40 per cent below the 52-week high of €1,995.00 touched last September. Even so, the current level is about nine per cent above the May trough of €1,099.80.

Technical indicators paint a cautious picture. The stock sits well under its 200-day moving average of €1,610.86, and the relative strength index of 40.9 suggests neither extreme selling pressure nor an imminent reversal. Annualised volatility of nearly 52 per cent underscores the turbulence.

That turbulence has been amplified by a shift in sentiment on the sector as a whole. Morgan Stanley cut its stance on European defence stocks from Overweight to Equal-weight on Tuesday, warning that near-term catalysts are scarce and momentum is fading. The US bank specifically flagged the risk that serious ceasefire negotiations between Russia and Ukraine could weigh heavily on market sentiment. Capital is rotating into European mining and semiconductor names instead.

Analysts acknowledge the long-term story remains intact, but short-term investors are demanding concrete orders, not roadmaps. Three upcoming events could provide the spark the stock needs: the Eurosatory defence exhibition in June, the NATO summit in early July, and Rheinmetall’s half-year results. Should those fail to deliver fresh impetus, the shares may be tested against their recent lows once again.

Rheinmetall’s involvement in the MQ-28 programme marks a notable shift in its business profile – away from traditional land systems and munitions and towards unmanned platforms and networked air combat. The question now is whether the market will wait until 2029 for the payoff, or whether nearer-term catalysts can lift a stock that has clearly lost altitude.