Rheinmetall (RHM) Stock Forecasts Up to 45% Sales Growth for 2026 as Europe Rearms

TLDR

• Rheinmetall forecasts sales growth of up to 45% in 2026, targeting 14–14.5 billion euros
• Full-year 2025 core profit hit a record 1.8 billion euros, up 33% year-on-year
• Order backlog reached a record 63.8 billion euros in 2025, expected to more than double to 135 billion euros in 2026
• The company is selling its automotive division to focus solely on defence
• A dividend of 11.50 euros per share has been proposed for 2025, up from 8.10 euros

Rheinmetall posted record profits for 2025 and issued a bullish outlook for 2026, forecasting sales growth of up to 45% as European rearmament drives demand for its weapons and munitions.

Rheinmetall AG, RHM.DE

Full-year 2025 sales came in at 9.9 billion euros, up nearly 30% from the prior year. Core operating profit rose by a third to a record 1.8 billion euros, with an operating margin of 18.5%.

For 2026, the Düsseldorf-based company is guiding for sales of between 14 billion and 14.5 billion euros. That range sits above the 13.6 billion euros that Berenberg analysts said the company had flagged in a pre-close call last month — a miss that had sent the stock lower.

The order backlog climbed 36% to a record 63.8 billion euros at the end of 2025. Rheinmetall expects that figure to more than double to 135 billion euros by the end of 2026, with new contracts flowing in from Germany, other NATO members, and Ukraine.

Russia’s invasion of Ukraine in 2022 was the initial spark for a continent-wide push to rebuild militaries that had been cut back for decades. That trend has gathered pace since Donald Trump returned to the White House, raising questions in European capitals about the reliability of US security guarantees.

Germany in particular has committed to a major military build-up. Chancellor Friedrich Merz has pledged to make the Bundeswehr Europe’s largest conventional army, a goal that feeds directly into Rheinmetall’s order book.

Automotive Exit and Naval Push

Rheinmetall has made two structural moves that signal a clear strategic shift. It has put its civilian automotive operations up for sale, exiting a segment at a difficult time for German carmakers, and will now focus entirely on defence.

On the other side, it acquired German warship builder Naval Vessels Luerssen (NVL), marking its first major step into naval defence. Land, air, space, and now sea — Rheinmetall is expanding across all domains.

The company also opened a new munitions plant in northern Germany last year — the largest in Europe — which will produce up to 350,000 artillery shells annually by 2027. More plants have been opened across the continent to meet demand.

Iran and US Restocking

Rheinmetall flagged a new avenue of growth: the war in Iran. The company said it is “inevitable” that countries will increase spending on missile restocking and air defence as a result of the conflict, and that it is well-placed to replenish US missile stockpiles.

The company expects an operating profit margin of around 19% for 2026, slightly ahead of last year’s 18.5%, even after accounting for consolidation costs tied to the NVL acquisition.

Analysts polled by the company project Rheinmetall’s sales will exceed 42 billion euros by 2030 — a figure that would have seemed far-fetched just a few years ago.

Rheinmetall will propose a dividend of 11.50 euros per share for the 2025 fiscal year at its May annual general meeting, up from 8.10 euros the year before.

The stock was down 5.87% on Wednesday despite the strong results, with RHM trading lower following earnings.

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