Rheinmetall Turns Auto Site into Drone Hub as €73bn Backlog Fails to Lift Shares

Rheinmetall pivots from automotive to defence with new loitering munition plant in Neuss, but shares fall 27% YTD despite €73bn order book and strong 2026 revenue guidance.

The Düsseldorf-based defence group has taken another decisive step away from its automotive roots, converting a former car-parts plant in Neuss into a production line for loitering munition. The first unit of the so-called kamikaze drone is due to roll off the assembly line in the third quarter of 2026. The factory will also manufacture the launch containers for the systems, marking the group’s final break with civilian supply chains — a shift that comes as concerns mount over multinational projects such as the Franco-German MGCS battle tank, where Paris is reportedly eyeing steep budget cuts.

The new weapon system itself was showcased this week at the Eurosatory arms fair in Paris. Rheinmetall presented a modular multiple launcher built into a standard shipping container, capable of carrying up to 18 FV-014 drones. The system features an integrated power supply that allows unmanned operation and can be controlled by a single operator firing a salvo. The drones have a range of 100 kilometres and can loiter for 70 minutes, straddling the line between reconnaissance and direct attack. Software integration is handled through Rheinmetall’s own “Battlesuite”, which links platforms, sensors and weapons across the battlefield.

Yet for all the operational momentum — the group’s order book stood at a record €73bn at the end of March — the stock continues to languish. Shares were trading around €1,165.80 on Wednesday, leaving the year-to-date loss at roughly 27%. The peak-to-trough decline from the all-time high stands at almost 42%, while the distance to the 52-week low is a mere 6%.

Technical indicators reinforce the bearish picture. The stock is currently trading about 10% below its 50-day moving average and nearly 27% beneath the 200-day line. The Relative Strength Index sits at 41.5, suggesting some stabilisation but still in neutral-to-weak territory. A recent low of approximately €1,100 was touched in mid-May.

Management offered no named customer for the new drone system at the trade fair, meaning investors have no immediate revenue contribution to anchor the share price. The market is waiting for firm commercial contracts before rewarding the stock. The company’s fundamental outlook remains intact, however. The board expects full-year 2026 revenue of up to €14.5bn and an operating margin of roughly 19%.

First-quarter revenue already climbed 8% year-on-year to €1.9bn, and management has flagged an acceleration in the current second quarter. Alongside the drone push, a new 155mm artillery line is set to extend howitzer range by a third, reinforcing Rheinmetall’s ambition to become a more independent systems house.

The next hard data point arrives on 6 August 2026, when the board presents second-quarter results. If the revenue and margin trajectory holds, the stock could find a floor near its current year low. For now, the gap between a booming order book and a shrinking share price remains as wide as it is puzzling.