$RHM.DE is down 17.5%! It’s now 59% below its ATH.
But why is it falling?
Rheinmetall expects revenue of around €13.2 billion this year, down from its previous forecast of €13.7–14.2 billion. Its operating margin estimate was cut from 19% to 18.5%.
The Arminius order for Boxer armored vehicles has been pushed back to 2027, along with the expected advance payments. Approval of artillery ammunition deliveries has also been delayed. The company still expects positive operating free cash flow this year, but has withdrawn its target of converting more than 40% of operating profit into cash. Well, things are slowing down, slowing down.
The price has now fallen below $900 for the first time this year—a fairly solid support zone until now. In my view, the German arms manufacturer is offering one half of investors an opportunity, while confirming to the other half that the stock is still expensive.
Do you have any arms manufacturers in your portfolio? It doesn’t have to be just Rheinmetall.