Rheinmetall’s share price has halved within nine months. Last autumn, a share in the Düsseldorf-based arms manufacturer was still worth over 2,000 euros; now it stands at around 950 euros. The trigger for the latest slump was the German Defense Ministry’s decision to abandon the construction of six frigates. Rheinmetall had positioned itself for the multibillion-euro project but now comes away empty-handed.
The stock’s rally began with Russia’s war of aggression against Ukraine. At the time, the share price temporarily rose to 20 times its pre-war level, as Rheinmetall supplied tanks, artillery, and ammunition on a large scale. But the downturn had already set in before the frigate deal collapsed. Analysts are questioning whether the company has overstretched itself with its full order books and recent acquisitions—such as the Lürssen naval division.
On Wednesday alone, the stock temporarily lost around 20 percent. While competitor TKMS, which is now set to receive the frigate contract, saw gains, Rheinmetall’s slide continued. The company, headquartered in Düsseldorf with its largest plant in Unterlüß, Lower Saxony, produces tanks, artillery, and drones, and has recently entered the satellite business.
Despite the price collapse, some financial analysts see further potential. Bankhaus Metzler, for instance, sets a price target of 2,180 euros—more than double the current level.
Source: www.tagesspiegel.de
