Rheinmetall Stock Plummets 17% as Profit Warning Signals Order Setbacks

Published on 5 November 2026 – 11:21 GMT+1

Rheinmetall AG, a leading German defence contractor, experienced a sharp decline in its share price, falling over 17% in early trading on Thursday. This downturn followed the company’s announcement of reduced annual sales and profit margin forecasts, attributed to significant order delays.

In a statement released on Wednesday evening, Rheinmetall revised its 2026 revenue expectations downward to approximately €13.2 billion, down from the previous range of €13.7 billion to €14.2 billion. The operating margin is now projected to reach around 18.5%, a decrease from the earlier forecast of 19%.

The primary factor behind this adjustment is the unlikelihood of a major German military order under the Arminius project being finalized this year. This delay will push related advance payments and revenue recognition into 2027. The Arminius initiative involves Germany’s planned large-scale acquisition of Boxer wheeled armoured vehicles, manufactured by Rheinmetall in partnership with KNDS.

Additionally, Rheinmetall anticipates lower-than-expected revenue from its expanding weapons and ammunition divisions, particularly due to challenges in its collaboration with Dutch firm Destinus. Compounding these issues, delays in acceptance checks for batches of artillery ammunition have also deferred some revenue to the following year.

Despite these setbacks, the company maintains a positive outlook for operating free cash flow throughout the full year. This marks the second revision to Rheinmetall’s sales forecast in 2026, following a similar cut in August after Germany discontinued the F126 frigate programme, which had previously promised substantial revenue contributions.

Rheinmetall Reports Strong Quarterly Performance

Amid the forecast adjustments, Rheinmetall disclosed robust results for the third quarter, surpassing market expectations. Sales surged by 32% to €3.149 billion, compared to €2.308 billion in the same period last year.

Operating profit for the quarter ending September 30 rose by 62% to €553 million, up from €342 million, enhancing the operating margin to 17.5% from 14.8%. Order intake stood at €2.893 billion, described by the company as a solid, albeit slightly reduced, level.

For the first nine months of the year, sales increased by 38% to €8.4 billion, while operating profit jumped by 69% to a record €1.339 billion. However, Rheinmetall’s shares have declined more than 48% year-to-date, reversing some of the substantial gains seen in previous years.

The broader European defence sector faced selling pressure on Thursday, with BAE Systems down over 4%, Leonardo losing 2.8%, Thales trading lower by 0.9%, and Babcock and Saab falling by 1.3% and 2.7%, respectively. These declines followed Wednesday’s losses, driven by concerns over increased scrutiny of US military spending post the Democrats’ election victory.

Analyst Robert Stallard of Vertical Research Partners predicted heightened congressional oversight of defence policy and spending. In response, JPMorgan reduced its price target for Rheinmetall to €1,150 from €1,350, maintaining a “Neutral” rating. Analyst David Perry expressed skepticism about the long-term outlook for certain army products and joint venture targets, suggesting potential cuts to 2030 goals.

Source link