Rheinmetall shares are trading near a 52-week low of €902.50, following a significant market correction that has erased more than a third of the company's value this year. On Monday, the stock rose 0.9% to €986.80, a modest gain that did not fully offset an 18% monthly decline or the 50% drop from its autumn record high of €1,995.
The volatility stems largely from Berlin’s June 24 decision to cancel the €20 billion F126 frigate program. This move removed the market’s assumption that Rheinmetall was a guaranteed beneficiary of Germany’s defense expansion. The cancellation triggered the stock’s drop to its current low, though the company continues to secure substantial business elsewhere.
Rheinmetall recently announced a multi-billion pound contract with Raytheon in the United Kingdom. This agreement follows other wins, including orders for 155 mm artillery munitions for Ukraine and autonomous military convoy systems. These deals highlight that the company’s operational engine remains active despite the political setback in Germany.
The company’s order backlog stands at a record €60 billion. However, the F126 cancellation has raised concerns about uneven cash flows and the potential for similar budget cuts to other land-system projects, such as the Puma infantry fighting vehicle. Investors are now watching the upcoming second-quarter report on August 6 to see how management addresses the impact on full-year guidance.
Technical indicators show the stock trading 34% below its 200-day moving average of €1,494.78, a level often viewed as a sell signal by institutional investors. The relative strength index is at 39.1, nearing oversold territory. Recovery attempts have previously been met with profit-taking.
Analysts note that Rheinmetall remains a key partner for land systems, ammunition, and laser weapons developed with MBDA Deutschland. A new €12 billion defense package under discussion in Berlin could direct funds toward these areas. However, the company’s price-to-earnings ratio topped 30 in June, well above its historical average of roughly 19, leading some to question current valuation levels.