Rheinmetall is Back in the Game: What Wall Street is Predicting

Rheinmetall AG receives an upgrade from Bernstein, one of Wall Street’s most prestigious independent research firms. The decision comes after a sharp correction in the share price, which analysts say now reflects a scenario close to a bear market.

The analysts maintain their core view on the company but raise the price target to €2,050 from €1,980. According to them, the risk–reward ratio looks more attractive after nearly a 20% drop in the stock since September.

The negative sentiment is driven mainly by discussions around a potential ceasefire in Ukraine. This weighs most heavily on companies reliant on short-term demand and Ukrainian orders. In this context, Rheinmetall—identified by Bernstein as the most exposed in the sector—has seen the steepest decline.

According to the report, the shares are currently trading at levels comparable to European defence peers’ 2028 valuations, and even at a discount relative to 2030 estimates. This comes despite expectations of stronger growth and higher margins than the sector average.

Bernstein stresses that the upgrade does not imply a shift in their cautious stance toward certain segments of Rheinmetall’s business. They still believe that funding for land combat systems may weaken, and that increased ammunition supply will put pressure on prices.

The analysts maintain more moderate forecasts than the company’s own 2030 targets. They expect €42 billion in sales versus the company’s goal of €50 billion, and an operating margin of 18.5% instead of “above 20%”.

Nonetheless, Bernstein notes that a larger order backlog, investments in automation, and agreed-upon advance payments will support solid revenue visibility.

According to the brokerage, the downside scenario suggests a drop of around 5%, while the base case sees roughly 30% upside potential, and the bullish scenario — over 50%.

The analysts highlight that Germany’s large-scale rearmament plans remain a crucial driver for Rheinmetall. They describe the German market as the “ideal environment” for the company, which stands to benefit significantly from Berlin’s ambition to build Europe’s strongest military.

Bernstein keeps its valuation method unchanged, applying a 16.3x multiple on discounted 2029 EBITDA — about a 10% premium to the European defence sector.

According to the analysis, the recent pullback creates a more attractive entry point for investors. The company continues to show exceptionally fast revenue growth and margins that already exceed most of the industry. Over the past 12 months, the stock has gained 163%.