Rheinmetall AG Stock (RHM.DE): Buy or Sell After the December 2025 Rout?

German defence champion Rheinmetall AG has gone from investor darling to DAX problem child in just a few weeks. After hitting record highs above €2,000 in early October, the stock is now trading around the mid‑€1,400s – a drop of roughly 28% – as peace‑talk headlines and profit‑taking trigger a brutal sell‑off across European defence names. ^[1]

At the same time, Rheinmetall’s fundamentals look stronger than ever: record sales, a €64 billion backlog and aggressive expansion of ammunition and air‑defence capacity. ^[2] Analysts still see substantial upside, but short‑term technicals have turned clearly bearish and volatility is high. ^[3]

This article looks at the latest price action, fresh news as of 2 December 2025, current forecasts and the key risks around Rheinmetall AG stock for medium‑ and long‑term investors.

Rheinmetall share price on 2 December 2025

As of Tuesday morning, 2 December 2025, Rheinmetall AG (ISIN DE0007030009, WKN 703000, ticker RHM) is changing hands on German exchanges at roughly €1,450–1,460 per share. Quotes from Xetra and other venues show: ^[4]

Last trade around €1,452–1,461, up slightly versus Monday’s close of €1,448
Day range so far roughly €1,435–1,465
52‑week range from about €593 to just over €2,000

That means the stock is still down almost 28% from its 52‑week high, even after a modest intraday rebound. ^[5]

A number of German market commentaries talk about the share “crashing” or “falling under the wheels” as it slid to around €1,447.50 at the start of the week, with sentiment dominated by headlines rather than company news. ^[6]

Why Rheinmetall is falling now

1. Peace‑talk headlines and sector‑wide sell‑off

Rheinmetall is being hit by a macro narrative rather than company‑specific bad news. On 24 November, Reuters reported that European defence stocks fell to four‑month lows as investors reacted to news of a “refined peace framework” discussed at U.S.–Ukraine talks in Geneva. Rheinmetall dropped about 4% that day, alongside other major European arms makers. ^[7]

The logic in the market is simple (and somewhat simplistic):

Peace talks → less war risk → less urgency for ammunition and weapons → time to take profits in defence stocks.

Analysts at Morningstar, quoted in the same Reuters piece, argue the reaction is “overstated”, stressing that European rearmament is driven by structural budget increases and that defence plans are unlikely to reverse even in the event of a ceasefire. ^[8]

2. Profit‑taking after a massive multi‑year rally

Rheinmetall has been one of Europe’s most explosive post‑2022 winners. A recent MarketScreener/Citigroup commentary notes that: ^[9]

Rheinmetall shares are still up around 130% since the end of 2024, and
roughly 1,600% since the start of 2022,
even after falling nearly 30% from all‑time highs above €2,000.

Citigroup points out that the broader European defence sector has corrected roughly 20–40% from October peaks, but views this more as an “entry opportunity” than the end of the story for defence stocks. ^[10]

3. Short‑term technical damage

Technical analysts have turned notably cautious:

StockInvest.us classifies Rheinmetall as a “sell candidate” since 21 November, noting a –15.9% drop over the last 10 trading days and expecting, based on its model, a potential further –16.9% decline over the next three months, with a 90% probability band between roughly €1,176–1,445. ^[11]
The stock trades in the lower part of a wide falling trend and is oversold on RSI‑14 (24), which can precede bounces but also signals elevated risk. ^[12]
A German XTB analysis highlights a clearly bearish chart: the share is below major moving averages (SMA 20/50/200), with possible downside targets around €1,374 or even €1,236 if it cannot regain its 200‑day line. ^[13]

In short: the stock is in a technical downtrend, even if long‑term fundamentals remain robust.

Fundamentals: record growth and a €64 billion backlog

Rheinmetall’s latest official numbers are from its Q3 2025 financial report, published on 5 November. They paint a picture of a company still in full growth mode: ^[14]

Group sales (9M 2025): €7.5 billion, up 20% year‑on‑year
Defence sales: +28%, driven by vehicle systems and ammunition
Operating result: €835 million, up 18% vs. €705 million a year earlier
Operating margin: 11.1% at Group level; 13.6% in the defence business
Backlog (“Rheinmetall Backlog”): €64 billion, up from €52 billion a year earlier
Order “Nomination”: €18 billion, below the prior year due to delayed German budget and order placements
Operating free cash flow: –€813 million, pressured by heavy capex, inventory build‑up and delayed German orders

Management explicitly reconfirmed its 2025 guidance, expecting for the full year: ^[15]

Sales growth of 25–30% (vs. €9.75 billion in 2024), and
an operating margin of around 15.5% (vs. 15.2% in 2024).

An independent strategy analysis summarising Rheinmetall’s growth story adds more colour: in 2024, the group generated €9.75 billion in sales (+36% YoY), with defence contributing about 80% and a record operating result of €1.48 billion. Earnings per share rose to €16.51, and the proposed dividend was raised to €8.10 per share. ^[16]

Taken together, this is a classic “growing faster than it can digest” story: strong revenue and profit momentum, but heavy investment and working‑capital needs weighing on short‑term cash flow.

New contracts and capacity expansion: from artillery shells to “Shahed‑killers”

Ammunition super‑cycle

The growth in Rheinmetall’s Weapon and Ammunition division underpins much of the long‑term investment case:

In the first nine months of 2025, the division generated €2.0 billion in sales, 30% higher than the prior‑year period, driven by tank and medium‑calibre ammunition plus artillery and mortar orders for NATO states and Ukraine. ^[17]
Backlog in this segment climbed to €23.2 billion, up 19% year‑on‑year, supported by multiple 155mm artillery contracts for European NATO countries. ^[18]

In parallel, Rheinmetall has announced a string of major artillery orders in 2025, including:

A €444 million contract for 155mm shells and propellant charges for a European customer, booked in late September. ^[19]
A U.S.‑funded contract worth around $512 million (via NATO channels) for artillery ammunition destined for Ukraine and other allies. ^[20]

Building new plants across Europe

To meet demand, Rheinmetall is in full capacity‑buildout mode. According to company disclosures and recent reporting:

The group is building or expanding 13 plants in Europe, including new ammunition and powder facilities in Lithuania, Latvia and Bulgaria. ^[21]
In Lithuania, Rheinmetall is negotiating a propellant production centre worth more than €400 million, focused on powder and energetic components – described by CEO Armin Papperger as addressing “the bottleneck…here in Europe, of powder systems and propellant systems.” ^[22]
Parallel investment plans are underway in Romania and other Eastern European locations for propellant powder and explosives (as highlighted in analyst commentary and company statements). ^[23]

Skyranger and air defence: new demand driver

Fresh news on 2 December 2025 underlines Rheinmetall’s push into air defence. A Defence‑UA article reports that the company is expanding production of its Skyranger turret – a 30mm gun‑based short‑range air‑defence system – by setting up manufacturing in Germany, Italy and Hungary to meet booming demand as a “Shahed‑killer” against Iranian‑made drones used in Ukraine. ^[24]

This positions Rheinmetall not only as an artillery and armoured‑vehicle supplier, but also as a key player in the rapidly growing market for counter‑drone and air‑defence systems, a theme many analysts see as multi‑year rather than purely war‑cycle‑driven.

Strategic shift: from struggling automotive supplier to “global defence champion”

Rheinmetall is accelerating its pivot away from legacy automotive components and towards pure‑play defence:

The company is converting former automotive plants in Germany (Berlin, Neuss and others) into defence facilities, while winding down loss‑making civilian activities. ^[25]
It is in the process of acquiring NVL, the naval division of the Lürssen Group, to build an in‑house naval arm covering surface combatants and other warships. ^[26]
Management talks openly about Rheinmetall becoming a “global defence champion” active “on land, at sea, in the air and even in space”, including a joint venture for Synthetic Aperture Radar (SAR) satellites (Rheinmetall ICEYE Space Solutions). ^[27]

Long‑term ambitions are equally bold: internal and external analyses highlight Rheinmetall’s target of €40–50 billion in annual sales by 2030, with large expected contributions from Vehicle Systems and Weapons & Ammunition, and a backlog potentially reaching €120 billion by mid‑2026 if current frameworks are fully implemented. ^[28]

Analyst price targets: consensus still points higher

Despite the recent correction, the analyst community remains broadly supportive of Rheinmetall:

MarketScreener lists around 18 analysts with a consensus rating of “Buy” and an average 12‑month target price of about €2,220, implying roughly +50% upside versus the current mid‑€1,400s share price. ^[29]
A separate compilation (StocksGuide) counts 24 analysts, of whom 20 rate the stock “Buy” and four “Hold”, with an average target near €2,244, a high of €2,625 and a low around €1,757. ^[30]

On the single‑house level:

BofA Securities recently trimmed its target slightly from €2,225 to €2,200 but maintained a “Buy” rating, citing Rheinmetall’s reaffirmed ambition to reach €40–50 billion in sales by 2030 and the prospect of backlog climbing toward €120 billion by mid‑2026. ^[31]
Barclays and Kepler Cheuvreux continue to rate the stock Overweight/Buy, emphasising Rheinmetall’s strong growth and margin profile versus European peers and its leverage to German and European defence budgets. ^[32]

Valuation‑focused platforms like Simply Wall St estimate an intrinsic value in the low‑to‑mid €2,000s per share based on discounted cash flow models, implying 25–35% upside to current prices – but emphasise significant uncertainty given the scale of Rheinmetall’s expansion plans. ^[33]

Of course, these are third‑party forecasts, not guarantees. They can change quickly with new data or macro developments.

Short‑term technical picture: downtrend, but oversold

For traders and technically oriented investors, the setup as of 2 December 2025 is mixed at best:

Downtrend: The share is trading below key moving averages (SMA20/50/200) on both daily and 4‑hour charts, which XTB characterises as a clearly bearish configuration. ^[34]
Bearish 3‑month outlook (model‑based): StockInvest’s quantitative model projects a possible range of €1,176–1,445 over the next three months, with an expected decline of about –17% from the €1,448 close on 1 December. ^[35]
Support and resistance:
- Support zones highlighted in recent technical commentary sit around €1,431–1,436, deeper bands near €1,403–1,417 and €1,308–1,322.
- Resistance is seen around €1,493–1,512, then near €1,550 (approximate 200‑day moving average), and a heavy zone between €1,640–1,668. A return to the old record‑high region above €1,940–2,000 would require a full trend reversal. TS2 Tech+1
Volatility: The stock has been moving about 3–4% per day on average recently; a single trading session can easily see swings of ±5%. ^[36]

For now, the market is treating Rheinmetall as a high‑beta macro and headline trade, even though its underlying contracts are multi‑year.

Insider buying: CEO steps in during the dip

One of the most notable news items around the current weakness is insider buying:

On 1 December 2025, CEO Armin Papperger bought Rheinmetall shares on the Quotrix trading platform at €1,421 per share for a total value of €298,410, according to a formal EU market‑abuse (EQS‑DD) filing. ^[37]

That corresponds to around 210 shares. The amount is small relative to the CEO’s overall wealth and the company’s ~€68 billion market capitalisation, but such purchases are often read as a signal of confidence that the pullback is overdone. ^[38]

German financial media picked up the trade under headlines like “Insidertrade: Rheinmetall shares added to the portfolio”, highlighting it as a supportive datapoint amid the sell‑off. ^[39]

Europe’s defence boom: structural demand vs. political risk

Structural growth tailwinds

The bull case for Rheinmetall is anchored in a long‑term European defence upcycle, not just current conflicts:

A study by EY‑Parthenon and DekaBank, cited in a recent market report, estimates that direct defence investments by European NATO countries will total around €2.2 trillion by 2035. ^[40]
The aerospace and defence industry body ASD reports that Europe’s sector turnover already grew 10.1% in 2024 to about $378 billion, underscoring the size of the opportunity. ^[41]

Rheinmetall, with its strong German base, expanding Eastern European footprint and heavy focus on NATO‑standard ammunition and vehicles, is positioned as one of the main beneficiaries of this rearmament trend.

Emerging political and regulatory risks

However, not all commentary is upbeat. A widely read analysis on stock3 warns that “you can earn too much with arms”, arguing that Rheinmetall’s high profit margins could eventually attract political scrutiny or calls for “excess profit” measures. ^[42]

Key risk themes flagged by analysts and strategists include: ^[43]

Headline risk from peace initiatives: As recent trading shows, each new report on Ukraine peace frameworks can trigger abrupt sector‑wide sell‑offs, even if budgets don’t change overnight.
Budget and election cycles: Rheinmetall’s Q3 report already shows how delayed German budget decisions temporarily depressed order intake (“Rheinmetall Nomination”). Future coalitions might slow the pace of spending increases.
Execution risk: Managing dozens of new plants, major acquisitions (like the NVL naval division) and a rapidly growing workforce is operationally complex. Missteps could hit margins.
Reputational and ESG pressure: As the world’s “fastest‑growing arms maker”, Rheinmetall faces increasing scrutiny from ESG‑focused investors, activists and some policymakers, which could affect its shareholder base and access to capital.

Investors need to weigh these political and execution risks against the strength of the company’s order book and earnings growth.

Investment takeaway: who might consider Rheinmetall now?

For longer‑term, fundamentally focused investors, Rheinmetall’s current setup looks like a classic tension between short‑term fear and long‑term growth:

Potential positives

Structural demand from European and NATO rearmament and sustained ammunition consumption. ^[44]
Record €64 billion backlog and strong 2025 guidance for both revenue and margins. ^[45]
Ongoing expansion into ammunition, air defence (Skyranger), naval systems and even space‑based defence assets. ^[46]
Broad analyst “Buy” consensus with average targets around €2,200–2,250, implying substantial upside from current levels. ^[47]
Insider buying by the CEO during the drawdown, which can be read as a vote of confidence. ^[48]

Key watch‑outs

A clearly bearish chart in the short term, with quantitative models still pointing to a possible drift lower and high day‑to‑day volatility. ^[49]
Political risk around peace processes, budget negotiations and potential pressure on margins or “war profits”. ^[50]
Negative free cash flow due to heavy investment and working‑capital build‑up, which could persist as long as Rheinmetall is in full expansion mode. ^[51]

Whether Rheinmetall AG stock is a “buy the dip” opportunity or a falling knife depends largely on your time horizon and risk tolerance:

Short‑term traders face high volatility and a fragile technical picture, where peace‑talk headlines and macro flows can easily overshadow fundamentals.
Long‑term investors who believe in a multi‑year European defence build‑up may see the current correction as a chance to enter a structural growth story at a discount to prior valuations – provided they are comfortable with political, ethical and execution risks.

As always, this article is for information and commentary only and is not investment advice. Before investing in Rheinmetall or any other defence stock, you should consider your own objectives, constraints and ethical stance, and, if necessary, consult a qualified financial adviser.

References

Rheinmetall AG Stock (RHM.DE): Buy or Sell After the December 2025 Rout?

Rheinmetall share price on 2 December 2025

Why Rheinmetall is falling now

1. Peace‑talk headlines and sector‑wide sell‑off