Rheinmetall shares gained 2.35 percent on Monday, closing at EUR 1,496.80, as investors welcomed a strategic move into guided missiles. The Düsseldorf-based defence group is establishing a joint venture with Dutch aerospace firm Destinus, named Rheinmetall Destinus Strike Systems. This partnership aims to develop and produce modern cruise missiles and ballistic rocket artillery, directly challenging the long-standing US dominance in long-range precision artillery systems like HIMARS.
The company’s aggressive expansion isn’t limited to new product lines. In a parallel push to capture a massive European contract, Rheinmetall has signed a letter of intent with Spanish technology company Indra. The planned joint venture, targeting a Spanish army order for up to 3,000 military trucks, holds a potential value of several billion euros and is expected to create hundreds of jobs. Formal establishment is slated for later this year.
Financially, the company has a robust foundation for these costly initiatives. For the full year 2025, Rheinmetall reported a massive revenue surge to EUR 9.9 billion, with an operating result of EUR 1.84 billion. Its order book provides even more stability, with a remarkable 91 percent of its targeted annual sales already secured by firm orders. The outlook remains ambitious, targeting annual revenue of up to EUR 14.5 billion.
However, this fundamental strength starkly contrasts with recent stock performance and technical indicators. Just last Friday, the share price dropped 5.4 percent to EUR 1,462.40, falling below the closely watched 20-day moving average. The stock remains below its 50-day line and has lost roughly 6.5 percent since the start of the year. A so-called Death Cross pattern in December further damaged the broader technical picture, with brief mid-week recoveries on geopolitical news quickly being sold off.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Analysts point to the stock’s lofty valuation as a key concern. With an expected price-to-earnings ratio of 43.7 for 2026, Rheinmetall trades at a massive premium to the sector average, pricing in ambitious growth long before it materialises. The upcoming quarterly report on 7 May 2026 is seen as a critical test. It must demonstrate that the company can maintain its targeted operating margin of around 19 percent to justify this premium and potentially break the current downward technical pressure.
The missile joint venture, where Rheinmetall holds a 51 percent controlling stake, is designed to reduce European dependence on overseas imports. Series production is planned for Unterlüß in Lower Saxony, with operational start anticipated in the second half of 2026 following regulatory approval.
Another colossal opportunity lies in the German Bundeswehr’s “Arminius” project for up to 3,000 GTK Boxer armoured vehicles. Rheinmetall’s share of this programme could be worth approximately EUR 22 billion, with a first contract for 1,800 vehicles expected in the first half of 2026. The company is also venturing into space: the SPOCK 1 project for radar satellite production, with a base value of EUR 1.7 billion, is set to begin in Neuss in the third quarter.
Shareholders have a key date in the diary for 12 May: the Annual General Meeting in Düsseldorf. The board will propose a dividend of EUR 11.50 per share, a 42 percent increase from the previous year. The confluence of major contract announcements, the first-quarter results, and the AGM will likely determine whether the stock’s fundamental horsepower can finally overcome its technical brakes.
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