Published on
Düsseldorf-based Rheinmetall AG saw its shares plunge more than 17% by 10:00 CET on Thursday after the German defence group cut its annual sales and profit margin forecasts.
In a statement released on Wednesday evening, the company said it now expects revenue of approximately €13.2bn for 2026, down from its previous forecast of €13.7bn–€14.2bn. The operating margin is expected to reach around 18.5%, down from 19%.
The company said a major German military order under the Arminius project was now unlikely to be placed this year, pushing the associated advance payments and revenue into 2027.
Arminius is Germany’s planned large-scale purchase of Boxer wheeled armoured vehicles, produced by Rheinmetall and fellow defence group KNDS.
Rheinmetall also expects less revenue than planned from newer activities in its weapons and ammunition business, particularly its cooperation with Dutch company Destinus.
Separately, delays in acceptance checks for batches of artillery ammunition will push some revenue into 2027, it said.
The German arms manufacturer still expects positive operating free cash flow for the full year.
This is the second time the defence group has cut its sales forecast this year, following a similar move in August after Germany cancelled the F126 frigate programme. Rheinmetall had expected to secure a major role in the project, and the cancellation reduced its expected annual revenue by €300m. Its operating margin forecast was unchanged in August.
Rheinmetall reports strong quarterly results
For the third quarter, Rheinmetall said it had met expectations, reporting sales up 32% to €3.149bn, compared with €2.308bn in the same quarter a year earlier.
Operating profit in the quarter ended 30 September rose 62% to €553m from €342m, boosting the operating margin to 17.5% from 14.8%.
Order intake stood at €2.893bn, which the company described as a good, although slightly lower, level.
For the first nine months, sales were up 38% to €8.4bn, and operating profit jumped 69% to a record €1.339bn.
The company’s shares have fallen more than 48% since the start of the year, reversing some of the sharp gains of the previous three years.
The wider European defence sector also faced selling pressure on Thursday. At around 10:00 CET, BAE Systems was down more than 4%, Leonardo lost 2.8%%, Thales traded lower by 0.9%, while Babcock and Saab lost 1.3% and 2.7%, respectively.
The falls followed losses on Wednesday amid concerns about tighter scrutiny of US military spending following the Democrats’ election victory. Robert Stallard, an analyst at Vertical Research Partners, predicted greater congressional oversight of defence policy and spending in a note to clients, cited by MarketWatch.
JPMorgan cut its price target for Rheinmetall to €1,150 from €1,350 following the warning, while keeping its “Neutral” rating. Analyst David Perry questioned the longer-term sales outlook for some army products and the targets for joint ventures announced since October 2024. He also warned that the company might have to cut its 2030 targets.