Rheinmetall shares fall 4.2% after full-year results
TL;DR
Rheinmetall shares dropped 4.2% after 2025 results, as earnings and cash flow missed expectations despite record orders and maintained guidance. Short-term concerns over execution risks and margin pressures overshadow strong defense demand and growth forecasts.
Tags
Rheinmetall’s shares fell 4.2% on March 11, 2026, following the release of its full-year 2025 financial results, despite the company maintaining its guidance and reporting a record €63.8bn order book. For Q3 2025, the firm reported net profit of €204m, a 18% year-over-year increase, with revenue rising 13.3% to €2.78bn, driven by growth in Weapon and Ammunition (+37.9%) and Electronic Solutions (+31.6%). However, earnings per share (€3.32) and EBIT (€315m) fell short of market expectations, while operating free cash flow deteriorated to -€168m, attributed to higher working capital needs and investments in defense infrastructure.
Management reiterated its full-year targets, forecasting revenue growth of 25–30% and an operating margin of ~15.5%, citing robust defense demand across Europe. Analysts at AlphaValue noted that delays in German procurement due to election-related budget delays and ramp-up costs for F-35 production are temporarily weighing on margins but emphasized that demand fundamentals remain strong. Morningstar highlighted expectations for order intake acceleration in Q4 2025 as delayed contracts materialized, though weaker cash flow generation and elevated capital spending are likely to persist.
The stock’s decline reflects short-term concerns over earnings misses and cash flow challenges, despite a confirmed outlook supported by a record order backlog. Analysts suggest the market may reassess the stock once execution risks are better defined, with Morningstar assigning a fair value of €2,220 and a four-star rating.
