Shares break support
Reuters reported that Rheinmetall was the STOXX 600's biggest decliner on November 5, with the stock down 13% at one point during the session.
Ariva's analysis identified sell signals from both the relative strength index, or RSI, and MACD. It said the shares would need to regain the €925–€955 zone to stabilize, while the next significant area of technical support lay between €680 and €710.
Contract delays lower sales and cash forecasts
Rheinmetall now expects 2026 sales of about €13.2 billion, rather than the €13.7 billion to €14.2 billion previously forecast. It also reduced its operating margin target from around 19% to around 18.5%, citing delays in military contracts and artillery ammunition deliveries, according to CNBC and Reuters.
Central to the downgrade is Arminius, the German armed forces' planned large-scale purchase of Boxer wheeled armored vehicles. The vehicles are built by ARTEC, a joint venture between Rheinmetall and the Franco-German group KNDS. Rheinmetall no longer anticipates a contract award in 2026 and now expects commissioning in 2027, shifting the associated advance payments and revenue into next year.
CEO Armin Papperger said in August that Rheinmetall's portion of an initial Arminius order could be worth about €12.4 billion. The company expected an advance payment exceeding €3 billion.
Without the Arminius advance payments this year, Rheinmetall reduced its cash conversion target—the ratio of free cash flow to operating profit—from above 40% to just over 0%, effectively abandoning its previous cash-generation goal.
This was the second outlook reduction in three months. According to CNBC, the August cut followed Germany's decision to scrap plans to build warships, a project that would have represented Rheinmetall's largest order since World War II.
Quarterly growth contrasts with weaker outlook
The lower forecasts accompanied substantial third-quarter growth. CNBC reported sales of €3.15 billion, up 32% from a year earlier, and operating profit of €553 million, an increase of 62%.
New orders totaled €2.89 billion, less than quarterly sales, while the order backlog reached €78 billion at the end of the quarter. Operating free cash flow was negative €82 million.
Banks cut targets as CEO buys shares
Banks lowered their price targets following the guidance cut, DER AKTIONÄR reported. Bernstein moved its rating from "Outperform" to "Market-Perform" and reduced its target to €1,000 from €1,200. Oddo BHF shifted from "Outperform" to "Neutral," lowering its target to €1,200 from €1,670.
UBS cut its target to €1,100 from €1,360, while DZ Bank reduced its target to €1,205 from €1,705.
Papperger bought shares on November 5, the day of the plunge. A directors' dealings disclosure reported by SAT.1 / joyn newstime showed a purchase of 585 shares at an average price of €858.9477, for a total of €502,484.40.
Rheinmetall's next scheduled investor event is its capital markets day on November 27, 2026, according to DER AKTIONÄR.
