A Fresh Look at Rheinmetall (XTRA:RHM) Valuation After Recent Share Price Drop

Rheinmetall (XTRA:RHM) shares have shown some movement lately, with investors eyeing the recent data on returns and profitability. The company's stock trajectory raises questions about whether its strong revenue and net income growth can continue to drive interest.

See our latest analysis for Rheinmetall.

After an impressive rally throughout 2024, Rheinmetall’s share price has hit turbulence and dropped 18.2% over the past month, even though its total shareholder return for the past year stands at a staggering 138%. This rapid upside, followed by a recent pullback, suggests shifting momentum as investors weigh the company’s remarkable multi-year growth against evolving market expectations.

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The question now is whether Rheinmetall’s recent dip signals an overlooked value, or if the remarkable gains of the past year mean the market is already factoring in all its future potential growth.

Most Popular Narrative: 82.1% Undervalued

According to EUinvestor, Rheinmetall’s fair value is set far above its latest close, projecting an ambitious future trajectory. This bold outlook is underpinned by standout growth assumptions and recent CEO commentary that point to massive order expansion on the horizon.

On April 17, 2025, Armin Papperger, Rheinmetall's CEO, said he expects orders to grow 450% by 2030. 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 EUR.

Read the complete narrative.

Curious how this narrative gets to such staggering numbers? The secret ingredient is a series of aggressive revenue and order book projections few are willing to make public. Find out how this valuation balances bold defense growth forecasts with future milestones yet to hit the headlines.

Result: Fair Value of €8,052 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, political surprises such as a truce in Ukraine or new EU tariffs could rapidly shift sentiment and trigger significant volatility in Rheinmetall's share price.

Find out about the key risks to this Rheinmetall narrative.

Another View: Multiples Tell a Different Story

Taking a look at traditional earnings ratios, Rheinmetall appears expensive. Its price-to-earnings ratio stands at 76.8 times, well above the industry average of 31.1 and peer average of 41.8. Even compared to its fair ratio of 54.5, this premium suggests a significant valuation risk if market sentiment changes. Is the optimism already overbaked, or is there more to justify this premium?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Rheinmetall Narrative

If you think there's another angle to consider or want to dig deeper into the numbers yourself, it only takes a few minutes to shape your own perspective. Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Rheinmetall.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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