Rheinmetall shares rose 1.90% to €1,580 in early trading as investors continued to evaluate the German defence giant’s strong earnings report and aggressive growth outlook. The Düsseldorf-based company remains one of the biggest beneficiaries of Europe’s rapidly expanding military spending, driven by geopolitical tensions and the continent’s push to rebuild defence capabilities.
The latest share move follows a volatile reaction earlier in the week when Rheinmetall stock dropped more than 7% after the company released its full-year 2025 results. While the defence group delivered record revenue, profit growth, and a massive order backlog, the results still fell short of elevated investor expectations.
Rheinmetall delivers record €9.9B revenue in 2025
Rheinmetall reported consolidated sales of €9.9 billion for the 2025 financial year, representing a 29% increase compared with the previous year. The strong performance reflects surging demand for defence equipment as European governments accelerate military spending amid global security concerns.
Operating profit climbed to a record €1.84 billion, up 33% year over year. The company also announced plans to increase its dividend to €11.50 per share, significantly higher than the €8.10 dividend paid the previous year.
The company said rising defence orders and expanding military budgets across NATO countries were key drivers behind the growth. According to Rheinmetall, the tense global security environment continues to strengthen demand for its products.
Defence demand pushes order backlog to €63.8B
One of the most striking figures in the company’s results was its rapidly expanding order backlog. Rheinmetall said its backlog reached a record €63.8 billion, compared with €46.9 billion a year earlier.
The company expects that figure could grow even further as new military contracts are signed across Europe and allied countries. Management indicated the backlog could potentially reach around €135 billion by the end of the year as defence procurement accelerates.
Demand has been particularly strong for ammunition, armoured vehicles, air-defence systems, missiles and drone technology — all areas where Rheinmetall has been expanding production capacity.
Business with the German armed forces accounted for around 38% of total sales in 2025, increasing by four percentage points from the previous year. International markets represented the remaining 62% of the company’s revenue.
Rheinmetall forecasts 40–45% sales growth in 2026
Looking ahead, Rheinmetall expects another major expansion phase. The company forecast sales growth of 40% to 45% in 2026, with revenue projected to reach between €14 billion and €14.5 billion.
The defence manufacturer said global geopolitical tensions — including the war in Ukraine and instability in the Middle East — are driving increased demand for military equipment.
Chief executive Armin Papperger said the changing global security landscape is creating unprecedented opportunities for the company.
“The world is changing rapidly, and Rheinmetall is well prepared,” Papperger said in the earnings statement.
The company added that its technologies are becoming increasingly important for strengthening defence capabilities in Germany and partner countries.
Why Rheinmetall shares initially dropped after earnings
Despite the strong earnings report and optimistic outlook, Rheinmetall shares fell sharply following the announcement. Analysts suggested that the decline reflected extremely high expectations already priced into the stock after its strong rally over the past two years.
Defence stocks across Europe have surged as governments increase military budgets in response to geopolitical risks. Rheinmetall has been one of the biggest beneficiaries of that trend, which means investors are closely watching whether the company can keep up with the pace of demand.
Some analysts also expressed concerns about whether Rheinmetall will be able to expand production quickly enough to meet its rapidly growing order book. Scaling manufacturing capacity for advanced defence systems requires time, supply chain coordination, and skilled labour.
Those operational challenges could create short-term pressure even as the long-term outlook remains positive.
The bigger picture for Rheinmetall stock
Despite the temporary volatility, Rheinmetall continues to stand at the centre of Europe’s defence boom. Governments across the continent are committing billions of euros to strengthen military capabilities, replenish ammunition supplies, and modernise defence systems.
As one of the region’s leading defence contractors, Rheinmetall is positioned to benefit from this multi-year spending cycle.
The company has also been expanding its partnerships and securing new contracts to strengthen its market position. Recent agreements include defence technology collaborations and large procurement deals with European governments.
Investors are therefore closely watching the company’s production expansion plans and contract pipeline to determine whether Rheinmetall can sustain its rapid growth.
For now, the latest rise in the stock price to €1,580 suggests that market confidence in the company’s long-term defence growth story remains intact.
More information about Rheinmetall’s financial results and outlook can be found on the company’s official website and in detailed market coverage from Euronews Business.
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