Rheinmetall (XTRA:RHM) has pulled back from recent highs after an extended rally, even as demand for defense equipment stays elevated. That combination makes the current dip notable for investors who track long-term order visibility.
See our latest analysis for Rheinmetall.
After a huge run powered by rising defense budgets and big contract wins, the recent 1 month share price return of minus 9.9 percent looks more like a breather than a trend change. This is especially the case given Rheinmetall’s roughly 166 percent year to date share price return and enormous multi year total shareholder returns.
If you think defense rearmament might have further to go, it is worth exploring other opportunities across aerospace and defense stocks for similar long term themes and potential multi year compounding stories.
With earnings still growing fast, a hefty analyst upside and shares cooling after a spectacular run, the key question now is whether Rheinmetall is trading below its true potential or if the market already reflects years of defense growth.
According to EUinvestor’s narrative, Rheinmetall’s fair value for 2030 sits far above the last close of €1,610, implying dramatic upside if assumptions play out.
450% in 5 years
On April 17, 2025, Armin Papperger, Rheinmetall's CEO, said he expects orders to grow 450% by 2030.
Source: https://finance.yahoo.com/news/rheinmetall-ceo-expects-order-book-113644072.html
Price 8,052 EUR
The share price at the time of this information on 17/04/2025 was 1,464 EUR
Price estimate for 2030: 1,464 + 450% = 8,052 EURNATO spending in Europe
17/04/2025 The results of the NATO Summit held 24-26 June 2025 in The Hague, where it was agreed to increase defence spending to 3.5% of GDP and transport and IT infrastructure spending at 1.5% each year until 2035, were not yet known.
Source: https://www.nato.int/cps/en/natohq/official_texts_236705.htm
But there is one discrepancy: while the official NATO report talks about this budget increase to 3.5% + 1.5% annually, the European media talks about 3.5% + 1.5% as a target to be gradually reached by 2030-2035.
Want to see how one narrative jumps from today’s price to a multi fold target? The secret mix, explosive order growth, rich margins and a bold earnings multiple. Curious which precise forecasts make an 80 percent discount look reasonable, and how a single discount rate pulls it all together?
Result: Fair Value of $8052.0 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
