Rheinmetall (XTRA:RHM) stock is drawing attention after the company agreed with Lockheed Martin to co produce ATACMS missiles in Germany, creating a European centre of excellence backed by US and German government support.
See our latest analysis for Rheinmetall.
The ATACMS agreement lands at a time when Rheinmetall’s 1 day share price return of 2.29% contrasts with a weaker recent patch, including a 30 day share price return down 15.74% and a year to date share price return down 38.45%. At the same time, the 3 year total shareholder return of 295.60% and 5 year total shareholder return of more than 12x show how strong long term momentum has been, even after a 1 year total shareholder return decline of 45.74%.
If Rheinmetall’s defence focus has your attention, this could be a moment to see what else is moving in related areas via our 90 nuclear energy infrastructure stocks
Rheinmetall’s recent share price slide sits awkwardly next to rising revenue and net income, as well as a fresh missile production deal that could matter for years. Is the latest bounce just sentiment whiplash, or is it closer to what the business is worth?
Most Popular Narrative: 42.7% Undervalued
Compared with Rheinmetall’s last close of €986.00, the most widely followed narrative points to a fair value of €1,721.35, framing the recent volatility in a very different light.
The substantial increase in European and NATO defense budgets, particularly Germany's multiyear boost in core defense spend to 3.5% of GDP, combined with Rheinmetall's strong positioning and minimal competition in critical vehicle and ammunition programs, indicates a large, sustainable order intake pipeline (expected €80-120 billion backlog by mid-2025/2026), directly supporting robust top-line revenue growth for years to come.
Want to see what underpins that kind of backlog and revenue path for Rheinmetall? The narrative builds a detailed bridge between future earnings, margins and the fair value tag, but the crucial assumptions sit inside the full story.
Result: Fair Value of €1,721.35 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, if Rheinmetall stumbles on its rapid capacity expansions, or if European defense budgets soften, that upbeat fair value narrative could quickly lose traction.
Find out about the key risks to this Rheinmetall narrative.
Next Steps
If you are unsure about Rheinmetall due to the mix of optimism and concern, consider reviewing the balance of risks and rewards and forming your own view with the 3 key rewards and 1 important warning sign
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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