Rheinmetall’s share price plummets in Frankfurt following a profit warning for 2026 due to project delays
In the first nine months of 2026, the company reported a 68 per cent surge in operating profit to a new record of 1.3 billion, but has cut its forecasts for the end of the year
(Il Sole 24 Ore Radiocor) Rheinmetall has taken a heavy hit on the Frankfurt Stock Exchange following a profit warning for 2026 ‘due to delays in certain projects’, which came in the wake of its first-nine-month results – which, incidentally, showed substantial growth. Shares in Germany’s leading defence group have fallen by more than 16 per cent, leaving them at the bottom of the DAX and Stoxx Europe indices.
Revenue up 38 per cent in the first nine months, record profit
In the first nine months of 2026, Rheinmetall increased its consolidated turnover by 38 per cent to €8.4 billion, whilst operating profit rose by 68 per cent to a new record of €1.3 billion, with a margin of 16 per cent (up from 13.1 per cent). New orders totalled €19.1 billion, an increase of 19 per cent. The order book as at 30 September 2026 stood at €78 billion, up from €56.7 billion in the previous year. The share of turnover generated in Germany rose by 3 percentage points to 41.3 per cent, whilst the international share reached 58.7 per cent. Free operating cash flow was negative at 1,698 million euros, compared with -798 million euros in the previous year. The company attributes this change to the significant advance payments made by customers during the same period of the previous year, as well as to the build-up of stock and the increase in working capital requirements linked to achieving the turnover growth target. The real shock to the market, however, came with the downward revision of forecasts for the financial year. The group now forecasts turnover of around €13.2 billion and an operating margin of around 18.5 per cent for the 2026 financial year, which is lower than the initial projections (€13.7 to €14.2 billion, with a margin of 19 per cent). Rheinmetall explained the revision by citing delays in the Bundeswehr’s ‘Arminius’ project – the German army is in the final stages of negotiation and the order cannot be placed before next year – as well as delays in receiving supplies of artillery ammunition.
JP Morgan and Citi cut their target price
Following the warning, JP Morgan maintained its neutral rating but lowered its target price to €1,150 from the previous €1,350. Analysts point out that this is yet another warning. Furthermore, the long-term sales outlook for certain products is increasingly uncertain, JP Morgan adds, indicating that it has growing doubts about the targets set for the numerous joint ventures announced since October 2024. According to analysts at the US bank, the strategy is not fundamentally flawed, but the targets previously set are likely to be unrealistic. Experts are awaiting the Capital Markets Day on 27 November, at which they expect a downward revision of the 2030 targets, probably by a significant margin. At the start of the year, JP Morgan’s target price for Rheinmetall was still €2,250. The share price has more than halved from its all-time high of just over €2,000 reached a year ago. Citi analysts believe Rheinmetall still offers value despite this year’s further downward revision to forecasts due to delays in contracts, stating that much of the shortfall in the 2026 targets has merely been postponed, not lost. Citi has lowered its target price for the share to €1,374 from €1,408, but maintains a ‘buy’ rating. “Clearly, credibility has taken a hit, but we believe there is value,” say the US bank’s analysts.
