Main Reasons for the Record Rally
The German defense stocks Rheinmetall, RENK, and HENSOLDT continue to hit record levels, supported by several factors. Here are some of the key reasons for this development:
Investments in Defense
The European Union plans to invest up to one trillion euros in defense by 2030. This prospect boosts expectations for future demand for defense goods and contributes to the positive development of stock prices.
Geopolitical Tensions
The ongoing conflict in Ukraine and concerns about future security threats in Europe also contribute to the demand for defense goods. Experts expect that demand will remain even with a potential de-escalation, as US troops are still stationed in Europe and Estonia has concerns regarding Russian aggression.
Economic Outlook
Rheinmetall has a strong order backlog of about 62.6 billion euros, which could lead to a projected revenue increase of 25 to 30% by 2025. These positive economic prospects enhance investor confidence.
Analyst Assessments
Analysts have raised their price targets for these stocks, leading to further purchases by investors. For instance, Deutsche Bank raised the price target for Renk from 55 to 64 euros.
Current Developments
- Rheinmetall has nearly tripled its stock price in 2025 and has traded above 1,750 euros for the first time.
- RENK has also reached new highs, rising to over 62 euros.
- HENSOLDT has hit a 52-week high and is at about 82.35 euros.
Despite the positive development, experts warn of overheating in the markets and recommend consolidation to ensure the sustainability of the rally.