Rheinmetall
Note: This is a daily stock update and the information stands true as of 05/05/26, 09:00 CET
Company Update:
Sales came in at €1.94bn, roughly 15% below consensus.
Operating profit was well below expectations at €224m (a ~15% miss), although the operating margin held perfectly in line with estimates at 11.6%.
OFCF disappointed significantly at -€285m, severely missing the +€181m consensus due to intense working capital build-up and low customer prepayments.
While management attributes the shortfall to temporary phasing effects, specifically delayed truck handovers and the Murcia plant ramp-up shifting volume to Q2, the magnitude of the top-line and cash flow miss is hard to ignore. The group confirmed its aggressive FY26 guidance of 40-45% sales growth and ~19% margins, which means the year is now heavily back-end loaded.
Bottom line: the broader defense narrative and massive €73bn backlog remain intact, but Rheinmetall is strictly becoming a "show-me" execution story. We expect a negative reaction.
Expert Opinion:
The miss is substantial indeed and I expect that even though they maintained the FY guidance, consensus will adjust down. Valuation remains expensive, even after the substantial drop in share price over the last three months (-17%), with PE26 at 31.3x down to 21.8x for 2027. Yet, Rheinmetall offers a unique equity story in Europe. It is too expensive at this stage but with the expected drop in price, it may become palatable again. Rheinmetall should be back on your radar. Any sharp drop (say 20% or more) would provide an entry point to play the long-term story.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
The miss is substantial indeed and I expect that even though they maintained the FY guidance, consensus will adjust down. Valuation remains expensive, even after the substantial drop in share price over the last three months (-17%), with PE26 at 31.3x down to 21.8x for 2027. Yet, Rheinmetall offers a unique equity story in Europe. It is too expensive at this stage but with the expected drop in price, it may become palatable again. Rheinmetall should be back on your radar. Any sharp drop (say 20% or more) would provide an entry point to play the long-term story.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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