Rheinmetall’s share price extended its sell-off, falling to its lowest level since February 2025 and turning one of last year’s top gainers in the DAX Index into one of its top laggards. The stock dropped to €803.6, which is 52% below its 2025 peak. The decline may continue in the near term after the company published its earnings this week. 024493
Rheinmetall stock dropped after earnings
Rheinmetall, one of the biggest defense players in Europe, has come under pressure this year, a trend that has been ongoing since the German government cancelled the large frigate program.
The stock continued falling after the management published its financial results, which showed that its revenue continued its strong momentum. Revenue rose by 38% in this period to €8.4 billion, with its operating profit rising to €1.3 billion.
The challenge, however, is that management lowered its forward guidance. It now expects that its annual revenue will jump to about €13.2 billion, with the management blaming a delay in projects. In the last report, the company had guided to revenue being between €14 billion and €14.5 billion.
Most of the weakness will be in the vehicle systems business, which is expected to make between €5.8 billion and €5.9 billion. Its weapons and ammunition, air defense, digital systems, and naval systems are expected to come in at €4.5 billion, €1.1 billion, €2.3 billion, and €1.2 billion. In a statement, the company’s CEO said:
“The strong order book gives us the opportunity to expand our capacity over the long term, and we recently started production at new plants in the United Kingdom and in Albacete, Spain.”
Rheinmetall and other defense companies are facing some major challenges and opportunities ahead. The most notable is the fact that demand for its products is rising, as evidenced by its rising backlog, which jumped to €78 billion, much higher than the previous €56.7 billion.
Most of this demand is coming from Germany and other European countries, which have boosted their annual guidance in the past few years. This demand will likely continue rising.
The challenge, however, is the fact that the industry is being disrupted by startups. For example, a company like Anduril is making cheaper products in the defense industry. Also, the ongoing Iran and Ukraine wars have shown that warfare is changing, with drones becoming the most popular tools.
Rheinmetall share price technical analysis
RHM stock chart | Source: TradingView
The weekly chart shows that the RHM stock has been in a strong sell-off in the past few months, a trend that has continued this week. It dropped below the important support level of €901.9, its lowest point on June 22nd.
The stock has also dropped to the 61.8% Fibonacci Retracement level. It also fell to the 61.8% Fibonacci Retracement level, and moved below the 50-week moving average.Therefore, the stock will likely continue falling, potentially to the key support level of €600.
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