If European NATO members would raise their military spending to ~3% of their GDP, this would mean a combined yearly spending of over 500b€.

Rheinmetall management assumed on 12th March 2025 that 20% to 25% of the entire military spending could be spent with Rheinmetall. In my point of view, it seems likely as it would be difficult to spend such a big amount anywhere else but with Rheinmetall.

I do see a risk in that asymmetrical tactics and technology might become more important and that Rheinmetall would not be leader on that front. Also Rheinmetall would need to quickly expand it's production and it's supply chain would have to keep up.

For the immediate future, most important is the change of the German constitution until end of March in order to expand the military spending in Germany. This depends on some intricate politics and is time critical since the new majorities from April 2025 would not allow a change of the German constitution anymore.

In it's most optimistic scenario I see yearly revenue rise to over 100b€. (500b€ defence spending x 20% and thus a fair value of over 7k€ per share while assuming 20% profit margin, as rheinmetall management assumed)

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