Update shared on 19 Nov 2025
Fair value Decreased 0.095%Rheinmetall's updated analyst price target has seen a moderate increase to approximately EUR 2,170 from EUR 2,150. Analysts cite stronger expected revenue growth and sector tailwinds, while noting slightly lower anticipated profit margins and elevated valuation levels.
Analyst Commentary
Recent analyst coverage of Rheinmetall highlights a mix of optimism about the company's future growth prospects and caution regarding current valuation levels and execution challenges. Below, key bullish and bearish takeaways are summarized from recent Street research.
Bullish Takeaways
- Bullish analysts have raised price targets, citing stronger revenue growth expectations fueled by robust sector tailwinds and heightened defense spending across Europe.
- Rheinmetall's significant exposure to markets with growing defense budgets, particularly Germany, supports increasing order visibility and long-term contract potential.
- Several firms have initiated coverage with positive ratings and note the company's position in what is described as the most significant rearmament cycle in decades.
- Constructive sentiment persists based on Rheinmetall’s strong order book, perceived industry leadership, and momentum from recent rallies.
Bearish Takeaways
- Bearish analysts express concern that shares are already "priced for perfection," suggesting valuation risk if growth expectations are not fully met.
- There is some caution regarding slightly lower anticipated profit margins amid rising costs and sector competition.
- High stock valuations prompt calls for a selective approach within the sector. Some suggest that upside may be limited from current levels.
- Execution risk remains a consideration, particularly if recent momentum in sector order flows does not persist.
What's in the News
- Rheinmetall is preparing to enter the shipbuilding business as part of a broad transformation aimed at making the company a one-stop shop for European defense needs, according to CEO Armin Papperger. The company plans to sell its civilian businesses in early 2026 to focus on land, sea, and air defense. (Key Developments)
- Industry sources report that Rheinmetall is interested in acquiring German shipbuilder Naval Vessels Luerssen, whose owners are planning to divest their military shipyards. Rheinmetall's supervisory board will consider the purchase in the near future, but any deal would require approval from the Luerssen family. (Key Developments)
Valuation Changes
- Consensus Analyst Fair Value: Edged slightly lower from €2,175.59 to €2,173.53.
- Discount Rate: Increased modestly from 5.33% to 5.45%.
- Revenue Growth: Risen from 34.93% to 37.04% year over year.
- Net Profit Margin: Marginally decreased from 12.83% to 12.53%.
- Future P/E Ratio: Declined from 40.08x to 37.36x, reflecting a lower expected valuation multiple.
Disclaimer
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