Rheinmetall shares plunge after profit warning over delayed orders

Rheinmetall AG shares fell more than 17% by 10:00 CET Thursday after the company cut its annual sales and profit margin forecasts. The Düsseldorf-based defence firm said in a statement Wednesday evening that it now expects 2026 revenue of about €13.2 billion, down from a previous range of €13.7 billion to €14.2 billion. The operating margin forecast was lowered to around 18.5% from 19%.

The downgrade stems largely from delays in a major German military order under the Arminius project. Rheinmetall said advance payments and revenue from Arminius, Germany’s planned large-scale purchase of Boxer wheeled armoured vehicles, are unlikely to materialise this year and have been pushed into 2027. The company also expects less revenue from newer weapons and ammunition activities, particularly its cooperation with Dutch company Destinus, and cited delays in acceptance checks for artillery ammunition batches.

Second forecast cut this year

This is the second time Rheinmetall has cut its sales forecast this year. In August, the company reduced its outlook after Germany cancelled the F126 frigate programme, which lowered expected annual revenue by €300 million. Despite the current warning, Rheinmetall still expects positive operating free cash flow for the full year.

Third-quarter results, however, showed strong growth. Sales rose 32% to €3.149 billion from €2.308 billion a year earlier, and operating profit jumped 62% to €553 million from €342 million. The operating margin improved to 17.5% from 14.8%. Order intake for the quarter was €2.893 billion, described as good though slightly lower. For the first nine months, sales increased 38% to €8.4 billion and operating profit rose 69% to a record €1.339 billion.

European defence stocks were broadly lower Thursday morning. BAE Systems fell more than 4%, Leonardo dropped 2.8%, Thales slipped 0.9%, Babcock lost 1.3%, and Saab declined 2.7%. The declines followed Wednesday losses on concerns about tighter scrutiny of US military spending after the Democrats’ election victory. JPMorgan cut its Rheinmetall price target to €1,150 from €1,350, keeping a “Neutral” rating. Analyst David Perry questioned the longer-term sales outlook for some army products and targets for joint ventures announced since October 2024, and warned the company might have to cut its 2030 targets.