Factors Driving the Momentum
- Geopolitical Developments: The outbreak of the Ukraine war has led to massive military build-up in Europe, significantly benefiting Rheinmetall as a defense manufacturer. The increasing importance of military rearmament in the geopolitical context, especially in the run-up to the upcoming NATO summit, supports this development.
- Financial Strength: Rheinmetall is seen as strong enough to support its own supply chains as well as benefit from ongoing investments in the defense industry. This is underscored by solid financial forecasts.
- Increased Price Targets: Analysts have raised their price targets for Rheinmetall shares. For instance, UBS analyst Sven Weier increased the price target from 1,840 to 2,200 euros and continues to recommend the stock for purchase. These increased price targets enhance the stock’s attractiveness for investors.
Stock Performance and Valuation
- Stock Performance: Rheinmetall shares have increased by an average of 55 percent annually since 2022. In 2025, the price increase already stands at 210 to 216 percent. The price has first exceeded the mark of 1,900 euros.
- Valuation: The stock market values Rheinmetall with a price-to-earnings ratio (P/E) of about 65, which is significantly higher than American defense companies like Lockheed Martin or General Dynamics, which are valued at P/E ratios of 17 and 19 respectively. Despite the high valuation, investors consider the strong growth forecasts and geopolitical developments.
Outlook
Rheinmetall shares could continue to rise strongly as geopolitical developments and increased military spending in Europe fuel demand for defense goods. The psychologically significant mark of 2,000 euros could soon be reached, supported by the recent price targets from analysts.