RHM.DE Stock Today: Bundeswehr Ammo Deal Lifts Shares — January 6
Rheinmetall stock is rallying in Frankfurt on January 6 after the Bundeswehr expanded its 30×173 mm Puma ammunition framework. The package now totals roughly €1 billion through 2028, with further call-offs worth several hundred million euros. RHM.DE traded near €1,752, up about 9%, helped by firm defense sentiment amid Venezuela tensions. Bernstein kept Outperform while trimming its price target to €2,000, citing strong backlog and earnings visibility. We explain what this move means, the key levels, and how German investors can approach the setup.
Bundeswehr deal: scale and profit drivers
The Bundeswehr ammunition contract expansion increases volume for 30×173 mm rounds used in the Puma IFV. Management guided to roughly €1 billion through 2028, plus optional call-offs worth several hundred million euros. This extends revenue visibility over multiple years and underpins production planning. For Rheinmetall shares, longer-dated schedules reduce near-term uncertainty and support a steadier delivery cadence across Weapon and Ammunition.
Higher throughput in ammunition can lift utilization and improve mix. Series production tends to carry better fixed-cost absorption, which can help margin progression as volumes ramp. With supply chains stabilizing, repeat batches should be more efficient than initial runs. That is a constructive setup for earnings quality. It also supports sentiment in Rheinmetall stock when investors focus on backlog conversion and cash generation.
Street view and valuation check
Bernstein reiterated Outperform and adjusted its Rheinmetall valuation to a €2,000 price target, pointing to strong backlog and clearer earnings visibility. The contract news, plus firm defense demand, backs that stance. German market commentary also highlights improving momentum for the name, including coverage on Warum Rheinmetall wieder gefragt ist and Rheinmetall – Aktie knallt rauf!.
At about €1,752, the shares trade around 92.7x TTM EPS of €18.9, reflecting high growth expectations. 2024 showed strong expansion, with revenue up roughly 36% and EBIT growth outpacing sales. Cash metrics lag due to heavy capex, with a high price-to-free-cash-flow ratio. Rheinmetall stock needs sustained order intake, better conversion, and margin gains to justify current multiples over the next 12 to 24 months.
Technical setup and levels to watch
Momentum is firm: RSI near 66 and CCI around 244 point to overbought conditions, while price trades above the upper Bollinger Band near €1,688. Volume of about 385k exceeds the 198k average, confirming participation. ADX near 22 indicates a building trend. For Rheinmetall stock, a high-volume breakout on contract news often attracts short-term traders, but overbought signals can lead to brief pauses.
Near-term support sits around €1,680 and the 200-day average near €1,683. The 50-day average near €1,607 is a deeper support. Initial resistance is the round €1,800 area, followed by the €2,008 year high. Traders in Rheinmetall stock often use rising moving averages as dynamic support. If price slips back inside the Bollinger band, a consolidation phase may follow.
What it means for German portfolios
For diversified German portfolios, defense offers an earnings cycle less tied to consumer demand. Still, investors should weigh budget timing, export approvals, and program execution risks. Valuation is rich, so position sizing matters. Rheinmetall stock can remain volatile around headlines. We prefer staged entries on pullbacks toward support while watching order flow and margin delivery.
Next, watch order announcements, any Bundeswehr budget updates, and production milestones. The company is scheduled to report earnings on March 10, 2026. Guidance on free cash flow and capex will be key for Rheinmetall stock. Backlog conversion, pricing, and supply chain commentary will shape expectations for 2026. A firm pipeline could keep multiples supported, even if growth normalizes.
Final Thoughts
Today’s move rests on clearer revenue visibility from the Bundeswehr ammunition contract and a supportive market tone for defense. Bernstein’s €2,000 target underlines the case for continued earnings growth, though the premium valuation demands solid execution. Technically, momentum is strong but overbought, so a pause would be normal after a sharp break higher. Our take: consider building exposure in steps, not all at once. Focus on backlog conversion, margins in ammunition, and cash flow progress. For traders, watch €1,680 to €1,607 as supports and €1,800 to €2,008 as resistance. Rheinmetall stock remains a leader, but discipline is essential.
FAQs
Why is Rheinmetall stock up today?
The Bundeswehr expanded its 30×173 mm Puma ammunition framework to about €1 billion through 2028, with additional call-offs possible. That boosts order visibility and supports earnings confidence. Broader defense sentiment is also firm, helped by geopolitical risks. This combination lifted the shares by around 9% intraday.
What is the Bernstein price target on Rheinmetall?
Bernstein reiterated an Outperform rating and set a €2,000 price target. The firm highlights order backlog strength and better earnings visibility following new contract news. While supportive, the target still implies selective upside from current levels, and execution on margin and cash conversion remains key.
Is the rally in Rheinmetall shares sustainable?
The setup is constructive given multi-year revenues and strong demand, but the valuation is rich. Momentum indicators are overbought, so pullbacks can happen. Sustainability depends on continued order intake, backlog conversion, and margin gains. Staged entries on dips and clear risk limits make sense for most investors.
What levels are most important for traders now?
Initial support sits near €1,680 and the 200-day average around €1,683, with deeper support at the 50-day near €1,607. Resistance is the round €1,800 level and the €2,008 year high. A sustained hold above the upper Bollinger band would keep the short-term uptrend intact.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
